Carbon economy

The protest was a sign of the controversial nature of the new "carbon" economy, dismissed by some environmental campaigners as a "sop" which allows people to feel better, instead of changing their behaviour.

As Climate Care itself says: "Planting trees is not in itself a solution to climate change - we need to focus on reducing fossil fuels and greenhouse gas emissions."

Many environmentalists believe the carbon offset' idea does have the power to halt our emissions of the greenhouse gas blamed by scientists for climate change.

One of them is Marc Stuart, of Oxford-based EcoSecurities, which acts as a go-between in the growing carbon trade under the Kyoto Protocol, whereby rich countries meet greenhouse gas emissions targets by funding cuts in developing countries.

He said: "I have witnessed the invention that occurs all over the world when you give people the market incentive to look through the carbon lens. It can change the way people do things.

"This mechanism has created a whole cadre of carbon entrepreneurs, who are looking at a way to create products or projects which sequester carbon dioxide and remove it from the atmosphere. A decade ago, there were only 200 people working on this. Now there are tens of thousands."

Mr Stuart has a robust response to critics of carbon offsetting.

He said: "If people want to go back to the 14th century, that's not going to get very far. Maybe that's something that we will have to come back to, but there are ways that we can reduce carbon going into the atmosphere now that are very efficient."

EcoSecurities is cashing in on the green gold rush' by handling the trade in carbon credits regulated by European governments and others signing up to the Kyoto treaty on climate change.

Power stations, oil refineries, chemical factories, aviation companies and other businesses producing large amounts of carbon dioxide are required by law to buy credits' to cancel out their emissions.

This money is then paid to other ventures, usually in developing countries, which reduce emissions. The market got off to a shaky start when the European companies overestimated their emissions, meaning that the price of the credits' plummeted. Since then, the regulations have been tightened up and the carbon credit market is booming - forecast to more than double in size to about £33.3bn by 2010.

Mr Stuart said: "Its a highly documented, highly regulated process, and we are the world experts at traversing it."

EcoSecurities finds businesses, usually in developing countries, that will either cut carbon emissions, or use up carbon already in the atmosphere, for example by tree planting.

He explained: "We have a high diversity of projects in 35 different countries - hydropower, biomass, landfill gas energy-capture projects, wind power, forestry - there are a wide range of things you can use."

Mr Stuart, who has a finance background, met co-founder Pedro Moura Costa, a plant biotechnologist, in Malaysia in 1993 while working on a forestry project.

The company is in Oxford because Dr Moura Costa's wife worked for SGS Forestry in Oxford. Although there was no greenhouse gas market, they kept faith with their idea throughout the 1990s by doing consultancy work devising the certification, advising governments and agencies on what the rules should be, as well as identifying projects.

They also advised companies on how to go carbon neutral' by reducing emissions and voluntary carbon offsetting. As well as engineers and technicians, the certification process involves dozens of lawyers and business development professionals.

Having worked in Central America for the UN, Dr Moura Costa knew of likely projects there. The world's first carbon credit certificate went to La Esperanza hydro project in Honduras in 2005. Another project, harnessing geothermal energy from hot springs, is at San Jacinto, near Oxford's Nicaraguan twin town of Leon. Now the projects span the world, and a range of technologies.

Two years ago, EcoSecurities had just 26 staff. Now it employs nearly 300, of whom about 100 are in Oxford. The burgeoning prospects attracted investment bank Credit Suisse, which now owns a ten per cent stake, having ploughed in £29.6m during a fundraising round which totalled £67.3m.

The deal led to the creation of one of the world's first carbon millionaires', since Dr Moura Costa made a paper profit of £4.8m.

EcoSecurities' war chest will be used to find more projects, and to buy up other companies in the same business, said Mr Stuart. The money will also allow EcoSecurities to gear itself up for the arrival of the biggest missing player in the carbon economy - the USA.

Credit Suisse is one of several investors betting on a big expansion in carbon trading if, as expected, the US launches a national scheme once President Bush leaves office.

"We have a very sustainable, high-growth business in Europe and Japan, but if the US comes into the climate regime, it certainly is not bad for us," Mr Stuart said.

Established: 1997

Co-founders: Pedro Moura Costa and Marc Stuart

Number of staff: 275

Annual turnover: £8m

Contact: 01865 202635 uk@ecosecurities.com