Sustainable markets to price climate risk. Where there is risk, there is opportunity. Climate risk mitigation is impacting the evolution of the energy landscape. The energy transition is a long-term phenomenon, underpinned by a market-based economy that can deliver cost-effective and scalable solutions.
The U.K. was the first major economy to legislate for net zero emissions, and has been a leader in market-based mechanisms to price the broader costs of pollution.
Milestones in the U.K.’s climate leadership include a pilot cap and trade program, prior to phase one of the EU Emissions Trading Scheme (EU ETS) in 2005. When the price signal under the EU ETS was not strong enough to incentivize a reduction in emissions, the U.K. introduced the Carbon Price Support mechanism, which has been credited with the near removal of coal in the country’s electricity generation merit order.
The U.K. Emissions Trading Scheme (UK ETS) replaces the country’s participation in the EU ETS and supports the aim of its carbon pricing policy. Our auctions and futures contracts will support the continuity of emissions trading for businesses in the U.K.
ICE has been a leader in environmental markets for nearly two decades. Today, our environmental markets span Europe and North America — the world’s most liquid environmental markets.
Corporates subject to carbon cap and trade programs and renewable fuel standards use our markets to meet obligations and manage their risk in the most cost-effective way. Markets participants can deliver carbon allowances, carbon offsets and renewable energy certificates into a range of registries in Europe and North America.
A growing number of corporates are signing up for voluntary commitments around the world. This means increasingly diverse stakeholders can use ICE’s markets to offset their carbon footprint, invest in green attributes or benchmark their internal cost of carbon. Policy makers rely on price signals from environmental markets to gauge the effectiveness of their programs and ensure desired outcomes — such as driving investment in renewables and the use of less-carbon intensive fuels. Investors can use the price signals from ICE markets and indices to help assess climate transition risk in their portfolios, and then access liquidity pools for managing risk and allocating capital to benefit from energy transition opportunities.
ICE Data Indices has a range of solutions for fixed income sustainable benchmarks that account for Environmental, Social and Governance (ESG) factors in addition to other criteria. Our Sustainability Indices, which include ESG constrained indices, carbon reduction indices and green bond indices, combine our fixed income capabilities with popular ESG strategy overlays.
Gordon Bennett, Managing Director ICE Utility Markets, examines the impact of the energy transition on various energy uses through the lens of a market operator and data provider.
Price transparency and liquidity that well-run energy and financial markets provide will enable an efficient energy transition. Gordon Bennett, Managing Director ICE Utility Markets, explains how financial markets put a cost on production.
Market highlights, volume, open interest and key dates.
Answers to frequently asked questions about carbon terminology and ICE’s carbon products.
Answers to frequently asked questions about green attribute markets terminology and ICE’s green attribute products.
Gordon Bennett, Managing Director Utility Markets, ICE discusses the energy transition, hedging, decarbonization and more with Lauren Smart, Managing Director and Global Head of ESG Commercial for S&P Global Platts Market Intelligence.