Summary

Lenka Martinek highlights the investment potential of carbon markets, particularly regulated ones, which aim to reduce greenhouse gas emissions by leveraging the scarcity principle to drive up carbon prices over time. Regulated markets, such as the European Union Emissions Trading System (EU ETS) and the California-Quebec Carbon Market, offer greater credibility and stronger prospects for price appreciation compared to voluntary markets, which face challenges related to standardisation and credibility. The EU ETS, in particular, is poised for significant changes under the Fit for 55 package, enhancing its appeal to investors. Global adoption of carbon pricing mechanisms and rising demand for carbon offsets are driving market growth, though the sector remains relatively immature and less liquid. Investors can gain exposure through carbon Exchange Traded Funds (ETFs) or direct investment in carbon allowances. While voluntary markets show potential with improving international cooperation, regulated markets remain the primary focus for investors due to their reliability and structured frameworks. Despite their unique long-term growth opportunities and diversification benefits, it is vital to conduct thorough research and carefully evaluate the specific risks and strategies associated with this evolving market.

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