Contribution of Finance to the Low Carbon Economy

Abstract

Given the advent and spread of carbon assets, as well as the rapid development of financial markets and transactions related with them, this paper intends to achieve the objective of categorizing these phenomena and describing their main charactristics, in such a way that it can be used as a reference by those professionals and scholars who are interested in the fighting climate change through the world of finance. In this line, this paper will review and analyse the main carbon assets on regulated and voluntary markets, Emission Reduction Purchase Agreements )ERPDs) and the various structures they may acquire, the role o carbon funds, futures and options over carbon assets, as well as adaptation in financial markets, particularly, in relation to climate derivates and disaster bonds. The paper ends with a proposal of a reference framework that generats and catogorizes different carbon assets, carbon markets and financial operations traded on these markets.