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Climate Change: Hong Kong well placed to act as go-between in carbon credits market as long as it adopts international standards, experts say
- The city aims to focus on the downstream activity of creating derivative products such as futures and options
- For trading to flourish, a regime with international quality assurance standards must be established, said panellists at the SCMP Climate Change Summit
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Hong Kong is well placed to become a regional carbon credits trading hub matching the financing needs of greenhouse gas reduction projects in China with global investors and emitters, according to experts.
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But an important prerequisite for trading to flourish is the setting up of a trading regime with international quality assurance standards, panellists at the SCMP Climate Change Summit said on Friday.
“Hong Kong has adopted international best practices in bond and stocks trading, attracting a very large and international group of investors,” said Jeff Huang, a co-founder of AEX Holdings, which facilitates forward electricity and carbon credits trading in mainland China.
“In the coming years, Hong Kong could still be the best venue for transferring international best practices to energy trading and efficient carbon pricing in China.”
The city’s role as the international finance centre of China – the largest carbon dioxide emitter, accounting for 30 per cent of the global total – has stood it in good stead, he said.
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Last July, China launched its first national carbon credits exchange in Shanghai. It primarily trades emission quotas allocated to over 2,000 power generators nationwide under a mandatory trading scheme designed to incentivise emissions reduction by putting a price on it. Generators whose emissions exceed their quotas must buy them from peers that have cut their emissions below their allocations.
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