The trade in carbon credits has rapidly grown into an estimated US$270 billion market over the past 15 years, and continues to grow as countries around the world devise regulatory regimes that limit carbon emissions.
Today, carbon trading systems exist in 38 countries, including an international system in Quebec and California. In general these systems place a cap on overall emissions, and at the end of a specified period of time, major emitters must produce enough carbon credits to account for their share of emissions, or else face fines and penalties.
Wilson said that Ninepoint’s ETF will initially use investor funds to purchase future contracts on carbon credits in the three most liquid emissions trading systems, based in the European Union, the shared Quebec and California market, and the collaboration between 11 U.S. states in the Northeast that’s known as the Regional Greenhouse Gas Initiative.