Hong Kong needs Stock Connect-type trading regime to make carbon exchange work, says SFC’s Ashley Alder
- Hong Kong’s proposed carbon-trading exchange will need a trading mechanism that blends together disparate regulations in China and overseas, says SFC CEO Alder
- A report on the feasibility of a carbon-trading exchange based in Hong Kong is expected to be ready later this month
“It has to be a scheme with a credible regulatory system – just like the Stock Connect … where multinationals and financial actors will be able to interact with carbon traders in the mainland,” he told the Green Asia Summit hosted by the Hong Kong Exchanges and Clearing (HKEX) on Thursday. “It’s super difficult, because it is not only about the market design, it’s also about the economic design and that comes back to the global evolution of carbon pricing.”
He, however, added that the possibilities are enormous as China accounts for 30 per cent of global carbon emissions and Asia 50 per cent. “This is where the action [will be], not in Europe. We need to get our acts together.”
The Stock Connect link between Hong Kong and the Shanghai and Shenzhen exchanges allows international investors to trade mainland-listed stocks, and mainland investors to trade Hong Kong-listed shares.