DELHAISE 2012CIS Carbon Risk Management3
The Pricing of Carbon Credits
To date, the most visible instance of carbon pricing has occurred inEurope with the EU at the forefront of carbon legislation. The
EUA price is largely a function of reduction commitments, powerdemand and the marginal cost of abatement (Including both E.U.based internal abatement & imported CDM abatement)
Many other standards exist for Carbon Credits, especially in thevoluntary markets, but we shall concentrate on CERs, the unitsassociated with
Clean Development Mechanism underthe Kyoto Protocol.