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New Benchmark Index In Global Price Of Carbon Launched By ICE


04/22/2020


New Benchmark Index In Global Price Of Carbon Launched By ICE
A new index designed to track and benchmark the global price of carbon was launched by Intercontinental Exchange, Inc., which is a leading operator of global exchanges and clearing houses as well a provider of data and listings services.
 
The firm said that the launch of this benchmark is an important part of the efforts that have been enforced to be able to measure and reduce the emission of carbon dioxide CO2 as well as other pollutants in countries and economies all around the world. 
 
The pricing from the three most actively traded carbon markets in the world makes up the new ICE Global Carbon Futures Index. Those markets include the European Union Emissions Trading Scheme (EU ETS) that was initiated in 2005, the California Cap and Trade Program which began in 2013 and the Regional Greenhouse Gas Initiative (RGGI) that was initiated in the year 2009. 
 
The markets that have been included in the new benchmark are among the largest regional economies of the world. Further, the secondary futures market for those programs which also trade on the futures markets of the ICE also make up the majority of volume in all carbon-based futures contracts.
 
“While the world is focused on quantifying the impact of COVID-19, this Earth Day, we’re also reminded of the importance that metrics and benchmarks will play in reducing carbon emissions and mitigating against global warming,” said Lynn Martin, President of ICE Data Services.
 
“This is a first step in producing an accurate, transparent global price for carbon, and one that utilizes a market-based mechanism for the evaluation of that price, as we move toward the longer-term shift to a net-zero carbon economy,” Martin said.
 
A volume weighted average price is provided by the ICE Global Carbon Futures Index and this new benchmark also measures the performance of a long-only basket of ICE EUA Futures Contracts, ICE California Carbon Allowance Futures Contracts and ICE Regional Greenhouse Gas Initiative Futures Contracts.
 
The index is calculated in US Dollars and calculated throughout the day.
 
For each of the constituent markets - the ICE EUA Carbon Futures Index, ICE CCA Carbon Futures Index and ICE RGGI Carbon Futures Index, the ICE has also launched carbon price indices.
 
The ICE EUA Carbon Futures Index will be calculated and published in Euros and the other indices will be calculated and published in U.S. Dollars.
 
(Source:wwwstreetinsider.com)