Fundamentals of Carbon Markets

Course Overview

Carbon allowance, credit and offset programmes have been part of the drive towards reducing global greenhouse gas (GHG) emissions for twenty years or more – the Clean Development Mechanism (CDM) is part of the Kyoto Protocol discussed at the UNFCCC’s CoP 3 meeting in 1997 and the EU’s Emissions Trading System was launched in 2005 and is now in its fourth phase.

Although many national schemes and initiatives for international cooperation have had issues relating to credibility – particularly relating to the genuineness of GHG emission reducing projects and initiatives and the carbon credits associated with them – the recent surge of interest in Voluntary Carbon Markets (VCM) and the Paris Agreement Crediting Mechanism (PACM) agreed at CoP 29 in Baku in 2024, as well as the CORSIA initiative in the Aviation sector have reinvigorated carbon markets and underline their importance – notwithstanding the challenges in implementation – in the reduction of carbon dioxide and other emissions.

This intensive programme provides delegates with a strong understanding of the underlying drivers behind the development and operation of mandatory or “compliance”, voluntary and international carbon markets and the roles of their different elements including carbon allowances, credits and offsets as well as carbon taxation regimes.

The programme also provides key insights into carbon pricing dynamics and the vital roles of assurance and accreditation in establishing and maintaining credibility in carbon markets. The course concludes with a review of the roles that banks and other financial institutions can play in carbon markets in supporting corporate clients in their participation as well as in the development and trading of carbon-related financial products.