Over the hedge

Uncertainties surrounding government commitments to decarbonising the economy create three key risks - missed carbon emission targets, low fossil fuel prices and low carbon prices. Such risks reduce the attractiveness of clean technology projects. But can governments themselves help hedge these risks? Professor Michael Mainelli FCCA FSI MEI, Z/Yen Group (a leading Londonbased commercial think tank) and Jan-Peter Onstwedder, Head of Risk & Portfolio, 3i, look at the role index-linked carbon bonds can play in addressing this issue.