Climate change: Hong Kong has much ground to cover before becoming regional carbon trading hub, government steering group says
- City should try and link international investors with China’s carbon markets, if it can develop the needed market structure and regulatory models, steering group says
- The global voluntary carbon market is forecast to grow by 50 per cent to 80 per cent this year to between US$1.5 billion and US$1.7 billion: Trove Intelligence
Hong Kong’s rule setters and would-be market makers of a credible regional carbon market have their work cut out for them, according to regulators and sector experts.
The city needs to decide whether and how it will regulate carbon credit trading, as it seeks to act as a bridge between surging global demand for carbon footprint offsets and the world’s largest potential supply of carbon credits in China, the cross-agency steering group – set up by the Hong Kong government to study green and sustainable finance – said in a preliminary feasibility report published on March 30.
To meet the needs of international investors, Hong Kong will need to subscribe to global standards for measuring, verifying and reporting on the carbon reduction performance of projects on which credits are earned, said Chin-Chong Liew, head of structured finance and derivatives for Asia at London-based international law firm Linklaters.