Some funds are investing in projects that cut emissions of greenhouse gases in order to earn cheap emissions credits that could be worth much more in the future, said Peter Fusaro, co-author of "Energy & Environmental Hedge Funds."
Such projects range from turning crop waste into fuel or capturing potent greenhouse gas leaking from landfills.
"This is a pure trading mentality, not an altruistic value of saving the world," said Fusaro, co-principal of New York-based consultancy Energy Hedge Fund Center LLC.
With environment investments, the trick is hedge funds must often have the patience to wait a few years between sinking money in projects and profiting from them.
He said before the Kyoto Protocol on global warming was launched in 2005, Dutch investors picked up emissions credits for about five euros a tonne and then profited when carbon prices shot higher.
Read the full story here: Green Hedge
Categories: climatechange, economy, investments