Contribution of Finance to the Low Carbon Economy
Constancio Zamora Ramírez, José María González González
DOI: 10.4236/lce.2011.22010   PDF    HTML     7,835 Downloads   15,996 Views   Citations


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 characteristics, in such a way that it can be used as a reference by those professionals and scholars who are in-terested 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 (ERPAs) and the various structures they may acquire, the role of carbon funds, futures and options over carbon assets, as well as adap-tation in financial markets, particularly in relation to climate derivatives and disaster bonds. The paper ends with a proposal of a reference framework that gathers and categorizes different carbon assets, carbon markets and financial operations traded on these markets.

Share and Cite:

Ramírez, C. and González, J. (2011) Contribution of Finance to the Low Carbon Economy. Low Carbon Economy, 2, 62-70. doi: 10.4236/lce.2011.22010.

Conflicts of Interest

The authors declare no conflicts of interest.


[1] N. Stern, “The Economics of Climate Change: The Stern Review,” Cambridge University Press, Cambridge, 2006.
[2] A. Brohé, N. Eyre and N. Howarth, “Carbon Markets,” Earthscan, Oxford, 2009.
[3] J. Pinkse and A. Kolk, “Multinational Corporations and Emissions Trading: Strategic Responses to New Institutional Constraints,” European Management Journal, Vol. 25, No. 6, 2007, pp. 441-452. doi:10.1016/j.emj.2007.07.003
[4] S. Labatt and R. White, “Carbon Finance: The Financial Implications of Climate Change”, John Wiley & Sons, Inc., Chichester, 2007.
[5] K. Tang, “A Guide to Carbon Finance: Carbonomics for A Credit Constrained World,” Risk Books, London, 2009.
[6] D. MacKenzie, “Making Things the Same: Gases, Emission Rights and the Politics of Carbon Markets,” Accounting, Organizations and Society, Vol. 34, No. 3/4, 2009, pp. 440-455. doi:10.1016/j.aos.2008.02.004
[7] P. Yeoh, “Is Carbon Finance the Answer to Climate Control?” International Journal of Law and Management, Vol. 50, No. 4, 2008, pp. 189-206. doi:10.1108/17542430810890369
[8] R. Bayon, A. Hawn and K. Hamilton, “Voluntary Carbon Markets,” 2nd Edition, Earthscan, Oxford, 2009.
[9] K. Hamilton, M. Sjardin, M. P. Stanley and T. Marcello, “Building Bridges: State of the Voluntary Carbon Markets 2010,” Bloomberg – New Energy Finance, 2010.
[10] K. E. Davis and S. Dadush, “Getting Climate-Related Conditionality Right,” In: R. B. Stewart, B. Kingsbury and B. Rudyk, Ed., Climate finance: regulatory and funding strategies for climate change and global development, New York University Press, New York, 2009, pp. 197-205.
[11] G. Daskalakis, D. Psychoyios and R. N. Markellos, “Modeling CO2 Emission Allowance Prices and Derivatives: Evidence from the European Trading Scheme,” Journal of Banking & Finance, Vol. 33, No. 7, 2009, pp. 1230-1241. doi:10.1016/j.jbankfin.2009.01.001
[12] D. M. Johnston, S. E. Sefcik and N. S. Soderstrom, “The Value Relevance of Greenhouse Gas Emissions Allowances: An Exploratory Study in the Related United States SO2 Market,” European Accounting Review, Vol. 17, No. 4, 2008, pp. 747-764. doi:10.1080/09638180802481615
[13] S. C. Lee and L. H. Shih, “Renewable Energy Policy Evaluation Using Real Option Model – The Case of Taiwan,” Energy Economics, Vol. 32, 2010, pp. S67-S68. doi:10.1016/j.eneco.2010.04.010
[14] M. McGready, “Accounting for Carbon,” Accountancy, Vol. 142, No. 1379, 2008, pp. 84-85.
[15] J. Ratnatunga, “An Inconvenient Truth about Accounting,” Journal of Applied Management Accounting Research, Vol. 5, No. 1, 2007, pp. 1-22.
[16] J. Fornaro, K. Winkelman and D. Glodstein, “Accounting for Emissions,” Journal of Accountancy, Vol. 208, No. 1, 2009, p. 40.

Copyright © 2024 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.