Research Primer: Carbon Emissions Market
The Aite group has issued a useful primer on the carbon emissions market that examines its regulatory and voluntary frameworks. The report looks at the Kyoto Protocol as well as various regional initiatives. It considers probable regulatory developments, and outlines execution and clearing processes for the carbon emissions market.
The growth that the carbon industry saw in 2008 will be a high point as the global economic slowdown will take its toll in 2009 and beyond.
Among the report’s highlights:
- The two houses of the U.S. Congress are expected to introduce similar “green” legislative bills, both containing accommodation for a CO2 (aka carbon dioxide) cap-and-trade approach.
- The issue of counterparty risk in the carbon market is similar to other commodity and financial markets. This fact has forced the market to adapt to clearing transactions through a futures-style centralized clearinghouse model.
- Regulation in the United States will involve multiple agencies with the Environmental Protection Agency (EPA) monitoring the registration and the Commodity Futures Trading Commission (CFTC) monitoring secondary trading activity.
The full report is available for purchase here.
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