Given the developments of the past few weeks, investors might be quick to blame the surging price of oil on the conflict between Russia and Ukraine, and they’d be right.
To push high-emission companies to shrink their carbon footprint, a number of jurisdictions around the world have instituted systems of carbon regulation.
The Ninepoint Carbon Credit ETF, a liquid alterative mutual fund with ETF Series listed as CBON, invests in three markets – the European Union ETS – indirectly through the use of carbon allowance futures.
“From an investor standpoint, it’s easier to access carbon futures that are publicly traded on exchanges.
According to Wilson, there are three major reasons why investors may want to consider having exposure to carbon credits.
Many more jurisdictions are expected to introduce their own carbon trading markets, and carbon credits are expecting to grow even further in price as both companies and investors get better at appraising the true environmental impact of carbon emissions.
And I challenge anybody to step back and look at the next five, 10 years and tell me there’s not going to be more industries put under tough regulation and paying higher costs of carbon in the future.
By increasing the costs of each allowance, they make it less economically viable for companies to produce carbon, creating an incentive for them to change.