buyers and sellers (e.g., a steel company and a project developer, respectively, in the case of carbon markets) In this issue brief, we discuss the role of financial are not well placed to forecast the price of an asset – a players in the carbon market, focusing on the critical piece of information for their decision-making. [...] Key areas of the reform include introducing a futures market in the K-ETS, The European Union (EU) permits financial players to permitting individual participation, and increasing the participate in the EU ETS, while South Korea did not in number of financial player participation in the K-ETS its beginning phases. [...] This resulted in a liquidity crisis driven consideration for the ICM will be on deciding where by low trading volumes, limited participation of entities, to allow financial participants to trade in the baseline and an oversupply of allowances to the extent that the and credit market or the offset market. [...] Like the EU ETS, the K-ETS relies on market stability measures to control the flow of allowances in the market and limits the holdings and borrowings of market participants. [...] However, allowing financial of KAUs on the Korean Exchange, which would boost players to participate in the carbon market requires liquidity in the market and increase the trading volume the establishment of a robust policy ecosystem that on the exchange – correcting imbalances (Etienne and safeguards the carbon market against manipulation.
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