The Carbon Ring Consortium - heralded as the first of its kind in the Asia-Pacific - aims to provide companies that have a future carbon liability with an understanding of this new market.
Carbon credits would be bought from domestic and international projects that achieve a reduction in greenhouse gas emissions and distributed pro rata to consortium investors to offset their greenhouse gas emissions.
The initiative comes as companies try to come to grips with the magnitude of the risks and opportunities presented by the 1997 Kyoto protocol, and the realisation that Australian firms - particularly exporters - are likely to be affected with the federal government ratifies the agreement or not.
Operating as an unregistered, managed investment scheme, the consortium is the first in a series of private investment vehicles Carbon Ring expects to launch in the coming years.
Investors must contribute US$100,000 each to the consortium, which is seeking to raise US$2 million.
Carbon Ring says prospective investors are likely to include Australian and international companies with operations and major plants in developed countries that may be subject to carbon constraints now or in the future, and companies with large greenhouse gas emissions and a significant greenhouse liability.
Companies which plan to invest in developed countries and companies with exposure to investments in assets that are exposed to the risks of climate change or climate change polices are also likely to be investors in the consortium, Carbon Ring said.
The consortium will showcase its activities at its inception meeting and first workshop in Sydney in November.
The fact that Rothschild and E3 are conducting a pilot project, rather than launching a more conventional funds management product, indicates how undeveloped and ad hoc the post-Kyoto carbon credits market is and how unprepared most companies are for a greenhouse-sensitive environment.
It also, however, indicates the potential growth in the market as companies come to grips with the magnitude of the risks and opportunities the protocol creates and the belief that Australian companies, particularly those which do business offshore, will be affected whether we sign the protocol or not.