Carbon trading and finance

Putting a price on carbon and promoting low-carbon investment is fundamental policy for controlling carbon emissions.

Carbon taxes and cap-and-trade are effective ways to incentivise businesses to reduce their emissions and invest in low-carbon technologies. This programme explores trading schemes design, how to promote low-carbon investment and the implications of carbon markets on public and private sector financial flows.

Research topics

Research

Comovement and the financialization of commodities

We investigate how the correlations amongst commodity futures have changed since the early 2000s. Using data from 1998 to 2011, we examine differences in the dependence structure of index and … read more »

Submission to the inquiry by the Energy and Climate Change Committee inquiry on ‘Leaving the EU: implications for UK climate policy’

This submission explores whether the UK should seek to stay in or leave the EU emissions trading system (EU ETS) as part of Brexit negotiations. It finds that leaving the EU ETS would result in the UK losing access to low-cost emission reduction opportunities that are only available in what is currently the world’s largest carbon market. It also highlights that leaving the EU ETS to link with other existing or planned emissions trading systems could generate significant administrative costs that potentially offset any economic benefits. read more »

Offsetting emissions: It’s not just the cost of carbon that matters to businesses

This commentary reflects on a recent report which looked at why some companies offset their emissions outside of Europe and why others don’t. read more »