Goldman Sachs recognizes that the new economy is a carbon-constrained one, and today the firm announced that it is taking an undisclosed stake in and partnering with emissions offsets developer Blue Source. Under the terms of the alliance, Goldman Sachs will structure and market a broad range of verified emissions reductions (aka VERs) created by Blue Source’s greenhouse gas reduction projects.
The partnership gives Goldman’s clients easy and integrated access to Blue Source’s offsets, allowing them to manage their carbon risks alongside the rest of their financial risks in both the voluntary and pre-compliance carbon markets. Blue Source’s offset portfolio, which generates VERs from emission reduction projects in coal mining, landfills, energy efficiency and carbon storage, will get high-profile placement in front of Goldman’s clients. This helps Goldman get in on the ground floor of the future multi-billion dollar carbon market and helps Blue Source connect to big customers. Others see the opportunity here as well: Och-Ziff Capital Management Group recently committed $500 million to Blue Source for project development.
This isn’t the first time Goldman has invested in companies developing the carbon market, either. APX, a Silicon Valley startup that certifies carbon and emissions offset certificates, received $14 million from Goldman early this year. We wondered if the crisis hitting financial markets would spill over into carbon markets, but perhaps the new business in carbon can help keep banking institutions going strong in new economy.
Goldman has a vested interest in seeing this carbon market develop, as Goldman’s investment group has millions in cleantech companies like GridPoint, Suniva, Cogentrix Energy and Iogen which could yield dividends not only through new cleaner and more-efficient technologies but also abated carbon. According to New Energy Finance, Goldman was the biggest cleantech investor in 2007, with $443.4 million invested last year.