In this short piece, we will examine carbon tokens: a tool of
increasing relevance in the battle to address climate change.
How are carbon instruments typically structured and
traded?
In the fight to address climate change, businesses and
individuals have choices and tools to consider. Companies, for
example, are increasingly identifying ways to reduce their carbon
dioxide (CO2) footprint. For example, this can be
accomplished by adopting cleaner fuels, identifying technologies
that may store or sequester CO2 emissions and changing
manufacturing processes.
Carbon trading is another tool available to businesses. The
purchase and sale of carbon attributes play an important role in a
diversified toolkit available to companies to address their climate
change goals and obligations. Market participants use instruments,
units or allowances (howsoever described) to provide a means to
address climate risks and exposures that such participants face.
Carbon trading is,
