Voluntary carbon market derivatives: Growth, innovation & usage
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 d...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2022-12-01
|
| Series: | Borsa Istanbul Review |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2214845022001053 |
| _version_ | 1828013587333906432 |
|---|---|
| author | Gregor Spilker Nick Nugent |
| author_facet | Gregor Spilker Nick Nugent |
| author_sort | Gregor Spilker |
| collection | DOAJ |
| description | 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. |
| first_indexed | 2024-04-10T09:47:39Z |
| format | Article |
| id | doaj.art-6d4c64dc0ddc46799622899d588444e7 |
| institution | Directory Open Access Journal |
| issn | 2214-8450 |
| language | English |
| last_indexed | 2024-04-10T09:47:39Z |
| publishDate | 2022-12-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Borsa Istanbul Review |
| spelling | doaj.art-6d4c64dc0ddc46799622899d588444e72023-02-17T04:54:32ZengElsevierBorsa Istanbul Review2214-84502022-12-0122S109S118Voluntary carbon market derivatives: Growth, innovation & usageGregor Spilker0Nick Nugent1CME Group, 300 Vesey St., New York, NY, USA 10282Corresponding author.; CME Group, 300 Vesey St., New York, NY, USA 10282Voluntary 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.http://www.sciencedirect.com/science/article/pii/S2214845022001053Q54Q58Q02 |
| spellingShingle | Gregor Spilker Nick Nugent Voluntary carbon market derivatives: Growth, innovation & usage Borsa Istanbul Review Q54 Q58 Q02 |
| title | Voluntary carbon market derivatives: Growth, innovation & usage |
| title_full | Voluntary carbon market derivatives: Growth, innovation & usage |
| title_fullStr | Voluntary carbon market derivatives: Growth, innovation & usage |
| title_full_unstemmed | Voluntary carbon market derivatives: Growth, innovation & usage |
| title_short | Voluntary carbon market derivatives: Growth, innovation & usage |
| title_sort | voluntary carbon market derivatives growth innovation amp usage |
| topic | Q54 Q58 Q02 |
| url | http://www.sciencedirect.com/science/article/pii/S2214845022001053 |
| work_keys_str_mv | AT gregorspilker voluntarycarbonmarketderivativesgrowthinnovationampusage AT nicknugent voluntarycarbonmarketderivativesgrowthinnovationampusage |