KRBN - Investing In The Pivotal $900 Billion Compliance Carbon Market

2024-05-15 02:14:30 ET

Summary

• Few investors are aware of the intricacies of the evolving $900 billion carbon marketplace and the unique investment opportunities that this area represents.
• The Head of Climate Strategy at KraneShares explains how their Carbon Suite and Global Carbon Strategy ETF focuses on the price of carbon as the agent of global energy transition.
• Investing in carbon allowances supports responsible investing, increases innovation, and incentivizes pollution reduction by creating price discovery and economic incentives.
• Carbon investing is a generational opportunity, institutional quality, and robust market; portfolios must be at least protected against or positioned to benefit from this rising price of carbon, and the portfolio characteristics of carbon position it as a strong alternative investment.

[Investors may have heard about carbon markets, carbon allowances, or cap and trade, but few are aware of the intricacies of the evolving carbon marketplace and the unique investment opportunities that this area represents. We may hear about the global environmental and sustainability conferences of Davos, UN's COP28, and many others that seem to propel discussion and action towards net-zero carbon emission goals, but many have no idea about the astonishing example of Capitalism and accelerating innovation that happens by putting a price or value on carbon and pollution.

Within the compliance carbon cap and trade markets, governments regulate the supply of carbon allowances, which drives the economic incentive to decarbonize and adopt more innovative, clean technology. Now, there is a price and a value to any invention that reduces or captures carbon. There is a large amount of money going into these efforts that just was not there. This act of pricing has created that "invisible hand" in the carbon marketplace and spawned a $900 billion market that many investors still know little about. ...

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