Climate futures markets

Scientific research confirms that humans have caused most of the climate change in recent decades. Climate change will continue, at a pace determined by the past, present, and future emissions of heat trapping gases,namely Carbon Dioxide (CO2), Sulfur Dioxide (SO2) and Nitrogen Dioxide (NOx). The continued high emissions of gases is expected to cause large amounts of warming in the future and reducing the emissions has become one of the main tasks of the developed countries since the introduction of the Kyoto Protocol in 1997. A market of emission allowances, often called carbon markets, has been created which has shown an interesting dynamic in the last decade. Futures markets on emission allowances were introduced at the “Chicago Climate Futures Exchange” and at the “European Climate Exchange”. Carbon markets were not immune to the economic crisis and in the past 5 years have shown high volatility and were completely delisted from the U.S. futures market.