Year: 2022
Type: article
Abstract: Voluntary carbon markets (VCMs) have emerged as a preferred market mechanism to support the global economy's transition to a low carbon future. Trading in carbon offset derivatives has moved into the financial mainstream with commodity exchanges now offering trading in VCM futures. This paper discusses the historical background of carbon trading, the market ecosystem of companies and organizations that provide the necessary infrastructure, and the evolution of VCM derivatives, focusing on CME Group listed instruments. The paper discusses findings that show that exchange-traded derivatives products can lead to increased standardization, transparency, and price discovery in nascent VCMs. We review academic literature published in this growing field of research and conclude by providing recommendations for areas of further market development and research.
Source: Borsa Istanbul Review
Authors: Gregor Spilker, Nick Nugent
Institution: CME Group (United States)
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $1,500
OpenAlex ID: W4309781015