Advertisement

Pollution solution

Reading Time:4 minutes
Why you can trust SCMP
0

Carbon trading

As the global war on pollution intensifies, major corporations are paying greater attention to a multitrilliondollar business which aims to cut back on carbon emissions.

Several countries are signing emissions trading agreements with big polluters. These schemes place a limit on the amount of greenhouse gases companies can produce, forcing heavy polluters to buy credits from firms that pollute less - thereby creating financial incentives to fight global warming. Now, Hong Kong wants to get in on the act and, at the beginning of this year, the Hong Kong Exchanges and Clearing (HKEx) said it wanted to offer Certified Emission Reduction (CER) futures and options as a hedging tool. The announcement was met with enthusiasm by both environmentalists and businesses.

And how much could this be worth? In a workshop last month, held by Hong Kong-based think-tank Civic Exchange at the Hong Kong Stock Exchange, Ian Johnson, a speaker and chairman of research company IDEAcarbon, said the global carbon market could be worth Euro500billion (HK$6.15trillion) by the year 2020.

Mr Johnson said that the biggest player was the United States and the biggest emissions trading organisation was the Chicago Climate Exchange. The exchange comprises non-Kyoto signatories, corporations with a corporate social responsibility (CSR) perspective and individuals looking to cut their carbon footprint.

What's more, investment banks, such as Goldman Sachs, are looking to profit from trading carbon futures in the same way as any other commodity.

Advertisement
Select Voice
Choose your listening speed
Get through articles 2-3x faster
1.1x
220 WPM
Slow
Normal
Fast
1.1x