By pledging nearly $20 billion to help commercial clients finance the use and production of new products, services, technologies and by initiating innovative conservation measures, Bank of America Corp. (BAC) could get the ball rolling for a $3 trillion market waiting to explode.
Bank of America has committed $18 billion in lending, advice and market creation to help its clients finance new technologies. It will also commence workings to allow clients the capability to trade carbon emission credits; carbon trading is a trend already started in Europe under Kyoto protocol to reduce greenhouse gases. A dollar value or allowance is assigned to carbon dioxide emissions and other greenhouse gases produced; by reducing emissions, companies can trade those credits for the opportunity for financial gain.
“Carbon-credit trading” is in part, a result of the 1990 Clean Air Act which has already been implemented in California and several other states and the business of trading sulfur-oxide credits to reduce acid rain.
“The investment opportunity is vast,” said author and consultant Peter Fusaro, at the Emissions Markets & Cleantech Opportunities conference in San Francisco. “There are untapped pools of capital looking for projects to scale, there’s a $3 trillion market sitting out there.”
Randy Lack of Element Markets, said to expect federal legislation by the end of 2009; every presidential candidate will try to introduce some kind of bill. Many companies have their eye on the growing investment opportunities but are hesitant to be the first to take part.
“CO2 continues to be an agenda item in most board rooms, but very few companies are actually taking steps to mitigate CO2 emissions or risks,” Lack said. “Mostly they’re just taking inventory on how much C02 they produce.”
A Bank of America eco-friendly credit card is also on the horizon; for every dollar spent, the bank will make a contribution to an environmental organization involved in greenhouse-gas reduction projects. Programs will be set up for existing cardholders and payments on home-equity loans as well. Home buyers may receive a reduced interest rate or $1,000 back for each home purchase mortgage meeting Energy Star specifications and the bank will commit $1.4 billion to receive Leadership in Energy and Environmental Design (LEED) certification for construction of all new facilities and banking centers
In addition, $50 million will be donated from Bank of America Charitable Foundation to support non-profit organizations concerned with forest preservation, innovative energy conservation, development of green, affordable housing and other programs.
Shares of Bank of America (BAC) were trading at $50.71 Tuesday afternoon.
