Carbon Credit Derivatives: rights and types of financial instruments

The Law of ESG Derivatives and ‘Regulation and Supervision of the OTC Derivatives Market’ 📙📕

In this episode, continuing our exploration inspired by The Law of ESG Derivatives: Risk, Uncertainty, and Sustainable Finance, published by Routledge in 2024, we delve into the intricate world of Carbon Credit Derivatives. Today, we focus on the different types of rights conferred by carbon credits and the various derivatives transactions that are prevalent in both mandatory and voluntary carbon markets. As the global carbon markets evolve, understanding the nuances of these rights and the corresponding derivative instruments becomes crucial for stakeholders aiming to navigate the complex landscape of carbon trading.

We will explore how carbon credits function within different regulatory frameworks, the distinctions between compliance and voluntary markets, and the financial products that have emerged to support carbon trading. Stay with us as we break down these key elements and provide insights into how they contribute to both environmental sustainability and financial innovation. In our next episode, we will tackle some of the ongoing challenges and controversies surrounding carbon credit derivatives, and how they might shape the future of global carbon markets.