On May 4, ISDA and the Association for Financial Markets in Europe (AFME) responded to the European Commission’s (EC) consultation on a legal framework for the inclusion of international carbon credits within the EU’s 2040 climate law framework. In the response the associations note that without a mechanism that permits high-quality international carbon credits to enter the EU Emissions Trading System or an analogous compliance market as fungible instruments with appropriate integrity safeguards, there will be no structural demand driver sufficient enough to generate the depth of liquidity necessary for the development of a liquid derivatives carbon market. The associations also note that a well-designed legal framework for international carbon credits will not only help the EU reach its 2040 targets cost effectively but will also incentivize climate action in the global south.
Documents (1) for ISDA and AFME Respond to EC on Legal Framework for International Carbon Credits
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