Financial Markets Standards Board (“FMSB”) has today published a Spotlight Review – An update on Carbon Markets.
This publication updates FMSB’s 2022 publication on Voluntary Carbon Markets, but widens the scope to include compliance markets.
The report notes that advancements have, and continue to be made, to the design and operation of both the compliance and voluntary markets to support their goal of fighting climate change. These include the increase in coverage, and decrease in emissions caps, seen in multiple jurisdictions’ compliance schemes, and the improvements to the certification practices for voluntary carbon markets.
However, there remain challenges to carbon markets achieving further scale. These include, among others, fragmentation and the non-fungibility of credits between markets, which will require international cooperation to accelerate their progress.
Looking to the future, the paper considers the potential future integration of carbon markets, connecting the voluntary and compliance, as well as individual, national, and international markets, into a single coherent framework.
Myles McGuinness, FMSB CEO, said:
“Carbon markets carry business and moral imperatives, as record-breaking temperatures in recent years demonstrate the significant, and human, impacts of climate change. This publication highlights the considerable challenges these markets face to achieve the scale needed to achieve their intended purpose, as well as the opportunities for them to thrive. If governments and market players want these markets to function effectively, collaboration and consensus is going to be needed on an international scale.
About FMSB:
- Financial Markets Standards Board (FMSB) is an industry-led, member-funded global standards body for the wholesale financial markets.
- Created out of the Fair and Effective Markets Review (FEMR) in 2015, FMSB brings together its Members from banks, investment institutions, infrastructure and information providers, corporates, pension funds and interdealer brokers, to develop Standards, Statements of Good Practice and Spotlight Reviews that raise standards of behaviour, competence and awareness – to promote the fairness and effectiveness of global wholesale financial markets.
- As well as standard setting, subject matter experts from member firms debate issues in working groups and are able to benchmark their approaches against industry peers, thus helping to lift standards of conduct.
- FMSB’s full membership list is here
For more information / media inquiries:
Laura Conaghan
+44 (0)7929 72669
Laura.conaghan@fmsb.com