What does carbon finance mean?
Carbon finance can be divided into narrow sense and broad sense. In a narrow sense, it is to innovate and integrate the relevant systems of carbon trading to form a perfect trading system, which is manifested as a carbon trading system or a carbon trading market. In addition, carbon finance in a broad sense also includes the transformation and upgrading of traditional financial activities. The core lies in the financial product innovation of institutional investors such as carbon bank, carbon fund, carbon insurance and carbon credit.
Therefore, carbon finance is to improve and integrate carbon trading from two aspects, one is the innovation of trading system and the other is the innovation of trading products. The carbon financial market can be divided into four sub-markets. They are primary market, secondary market, financing service market and supporting service market.
As far as the primary market is concerned, it is mainly the distribution and issuance of carbon emission rights, which is the starting point for the formation of carbon trading. The secondary market combines emission rights with traditional financial products, such as options, futures, bonds and funds, to form a unique innovative financial instrument. The financial services market will soon launch financial services for special assets such as carbon trading rights, such as carbon pledge, that is, loans with carbon emission rights as collateral. Support the service market, that is, research and development of carbon index, insurance and factoring of carbon emission rights, etc.
This is carbon finance. I hope it helps you.