Google founders support emissions fund

Google's co-founder, Sergey Brin, and the UK arm of the utility company E.on are among the backers of a $550m (£310m) fund that will buy carbon credits from the developing world.

Natsource Asset Management yesterday closed the biggest private-sector fund for investing in carbon credits, known as certified emissions reductions. Dirk Forrister, its managing director, said: "We're now open for business."

The fund will finance projects to cut emissions of greenhouse gases, which are blamed for global warming, in countries such as China and India. Those reductions are measured in tonnes of gas and verified, with fund investors given the resulting certifications. The investors can then use the certificates to cover their emissions or sell them.

Mr Forrister said it was cheaper to modify or build facilities in developing countries, and so the fund might finance a methane-capture project in India or a hydroelectric scheme in Chile. By combining resources, the Greenhouse Gas Credit Aggregation Pool (GG-CAP] participants can boost their purchasing power and ease management of the compliance instruments.

Google's Mr Brin, who was investing in a personal capacity, said: "As a first step we are taking to reduce our impact on the climate, Eric [Schmidt, Google's chairman], Larry [Page, its co-founder], and I have committed to reducing carbon emissions by investing in the Natsource Greenhouse Gas Credit Aggregation Pool."

The Google men are the only individuals involved in the fund, but Mr Forrister suggested certified emissions reductions may prove an attractive investment to high net-worth people. The other backers include consumer product makers, manufacturing groups, energy and utility companies, including Spain's Iberdrola and Japan's Chugoku Electric Power. Shigeo Shirakura, the president of Chugoku, said: "We believe our participation in GG-CAP will contribute to the prevention of global warming."

Countries that signed the Kyoto Protocol have an obligation to cut emissions of greenhouse gases by 2012. Natsource says these countries will be about 3.75 billion tonnes short of emission allowances over the 2008-12 period of the treaty.

Separately, a United Nations body issued the first certified emission reductions (CERs) under the Kyoto treaty yesterday, for two hydroelectric projects in Honduras which will produce 37,000 and 17,800 CERs respectively a year.