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With the Kyoto Protocol just coming into force, ER Reservoir has announced the formal launch of operations. Reservoir is an innovative vehicle which will help Canada meet its Kyoto emission targets in a secure, low-cost manner by sourcing and offering emissions reductions (ERs or so-called “carbon credits ‘), claims the firm.

Reservoir’s activities are designed to build on one of the major innovations of Kyoto: the notion of carbon as a tradable commodity. Carbon credits arising from renewable energy and energy-efficient projects can be priced and traded between buyers and sellers. Carbon credits are a crucial part of a country’s “carbon management “strategy. These credits can help meet emission quotas cost-effectively. They can even provide socially responsible investment returns.

The Canadian federal government will announce its detailed Kyoto strategy in the coming weeks. This strategy is expected to focus largely on domestic emission reduction efforts. But to meet its Kyoto targets by 2012, Canada will also need to buy carbon credits at home and abroad. The government is expected to earmark a significant amount for such purchases.

Canada’s Kyoto strategy is expected to focus largely on emission reduction efforts.

In announcing the launch of Reservoir, Diana Smallridge, managing partner, explains how the firm will help Canada realise its Kyoto goals. “This is an exciting launching point for Kyoto, and for Reservoir. For Canada to meet its Kyoto targets, it will rely on emission reductions at home, and on purchases of emission credits abroad,” she says.  “Reservoir sees a tremendous opportunity to bridge the gap between those who will generate these credits, and those who will need to buy and hold them.”

Reservoir helps source, structure, and monetise carbon credits arising from new “green “projects. These carbon credits are then placed with various end-buyers, including government, industry, and consumers. Reservoir will put special emphasis on pursuing renewable energy and energy efficient projects in developing countries.

“In poor countries, some 2bn people still lack access to basic energy supplies,” continues Smallridge. “Reservoir will help generate new streams of foreign investment and technical know-how to these countries. In return Canada will receive “green dividend “from now to 2012.”

Reservoir is headquartered in Ottawa, Canada and operates a European office in Rheine, Germany.