Redwood National Forest. Roman Khomlyak/Shutterstock
Oak Hill Advisors, an investment firm, is seeking 1,000,000 acres of forestland for carbon offsets.
Bluesource, which manages $52 billion of assets, joined forces with the firm.
Tuesday saw the announcement of the joint venture worth $500 million.
Oak Hill Advisors is an investment firm with $52 billion under management. They are looking for a million acres to buy and/or sell as the carbon offsets market blooms.
Oak Hill, a joint venture of Bluesource and corporate climate advisor Bluesource, plans to buy North American forests that could otherwise be used as timber and then sell them as carbon offsets. The companies announced this Tuesday in a press release.
Businesses are looking for ways to reduce their carbon footprint. One way is to use carbon offsets. These companies take credit for conserving trees that absorb carbon from the air. Insider previously reported.
The Wall Street Journal first reported that Microsoft and BP were among the businesses that bought up these tradeable assets in order to show investors that they are working towards their climate goals.
Bloomberg reported that the carbon credit market was valued at $300 million in 2018 and that one analyst estimates it could reach $100 billion by the end. According to the Journal, carbon offsets are controversial because some argue that companies should not be allowed to buy them instead of lowering their own emission.
According to the release, Bluesource and Oak Hill Advisors will choose land in the new partnership based on the increased climate benefits and revenue from carbon offsets.
The companies stated that this is a significant opportunity to repurpose forest investments, which would otherwise be solely based on timber harvest revenue.
Bluesource Chief Strategy Officer and Chairman Bill Townsend stated that the partnership was created to provide capital in addition to the company's carbon know-how to address "the global problems we face."
Oak Hill Advisors portfolio manager Adam Kertzner said that he is excited about the positive impact on the environment and the "highly appealing investment attributes."
He said, "This joint venture offers an opportunity to accelerate sustainable forestry's evolution and the continued development of carbon credit markets."
