Carbon credit investments defended after police warning

The Carbon Advice Group (CAG) has defended carbon credit trading after the police issued a warning about ethical investment boiler room scams.

City of London police said foreign boiler room operations were scamming £300m from Britain with fake investment schemes in carbon credits, forests and biofuels.

However, CAG defended carbon credit trading as a real long-term investment opportunity and said it supports the Financial Services Authority's (FSA) bid to clean up the sector.

CAG chief executive Matthew Sullivan said: "A few rogue operators cannot be allowed to discredit the entire sector.

"IFAs and potential investors thinking of exploring the carbon credit market should proceed with caution as the market is young and at the higher end of the risk spectrum.

"Carbon credit trading is here to stay. It is not a niche or short-term opportunity, but like all other business transactions needs to be considered properly and carefully."

He added the use of track-and-trace mechanisms, in which investments are checked and tracked at every stage of the trading process, can help to reduce exposure to scams.

Last month, Pointon York launched a carbon neutral SIPP in which investors could offset their carbon footprint by investing in carbon credits.