![]() Given that, companies that do take carbon out of the atmosphere by owning rainforests that do it naturally, or by technology that cleans the air, or that captures and stores polluted air should be rewarded, with the costs borne by those that emit the carbon. ![]() The theory behind carbon credits is simple: It is based on the fact that climate change is driven by net global carbon emissions, and the acceptance that, for now at least, moving completely away from fossil fuels is not practical for any country or even company. If Warren Buffett, Bill Gates and now Jeff Bezos believe in carbon capture and are using purchased credits to offset their own emissions, maybe we should all pay attention. It has also attracted more direct investment from names like Microsoft ( MSFT) and, more recently, Amazon ( AMZN). It is one of the factors behind Berkshire Hathaway ( BRK-B) taking a large position in Occidental Petroleum ( OXY), an oil and gas company that has invested a lot in carbon capture as the possible next stage of their evolution. Over the last decade or two, carbon capture and carbon credits have become legitimate businesses with some very big investors getting involved. Their tendency to get involved in booms that inevitably turned into busts convinced me that carbon capture would go the same way. So when they told me a while ago about their plan to get involved in carbon credits by buying some rainforest somewhere, it made me a bit skeptical of the whole business. They made a lot of money on some things, but lost just as much in others, such as when they held on to big positions in Dubai real estate just a little too long. What they have typically done is to chase the latest trend in business and finance, sometimes timing their exit correctly, sometimes getting burned. I have a couple of friends from my days in the interbank forex market who have been involved in a slew of business ventures together.
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