Emergence of secondary carbon financial vehicles

Emergence of secondary carbon financial vehicles

Originally submitted by Joe Ravetz
last updated by Rafael Popper

Weak Signal's progress: fully-fledged

This Weak Signal came from: 
European Commission Framework Programme for RTD

The theme/scheme related to this Weak Signal: 
Theme 6 - Environment (including Climate Change)

The sub-theme that best relates to this Weak Signal: 
Pressures on environment and climate

When did the Weak Signal manifest ? 
2005-now

Weak Signal's description 
Over the last decade there has been exponential increase in the volume of secondary carbon financial trading (e.g. compliance security, securitization etc). These are a logical development which spreads risk and provides security for rapidly growing portfolios: and the UNFCC-backed CDM system is increasingly linked to the major emissions permit trading scheme such as ETS. Each of these is dependent on political decisions on the size of the cap, and on market regulation: but there is a growing possibility that the political decisions will be driven by financial logic, rather than by environmental goals.