Emissions possible

Structured products based on carbon emissions are appearing in the institutional market, typically using indexes of companies that are cutting emissions. But linking to carbon trading as a pure asset class is also on the cards. Emma Dunkley probes a market that can only get bigger

Global warming has become a huge political issue in recent years and is now starting to make its presence felt in the realm of structured products. The carbon emissions market was hatched following the Kyoto Protocol, an international agreement designed to reduce the level of greenhouse gases, which came into force in February 2005. Banks, distributors and investors are now realising that the need to reduce carbon emissions provides a potentially lucrative platform on which to base structured