The Hong Kong stock exchange is well placed to set up an exchange platform for carbon trading, stated Alderman David Lewis, the Lord Mayor of the City of London. He addressed members of Hong Kong’s financial sector this morning at the end of a workshop co-organized by Civic Exchange and the British Consulate General and supported by Hong Kong Exchanges and Clearing Limited.
Keynote speaker Matthew Whittell, Chief Financial Officer of Climate Exchange PLC, the main presenter at the event, began the morning’s discussion by explaining that beyond carbon, there is a range of other environmental products that could be traded, including sulphur dioxide and even water.
He emphasized that Carbon Emission Reductions (CERs) could potentially be traded globally, and become a common global currency such that is needed to facilitate carbon trading in the absence of an international system in trading. There was the issue of whether government should opt for trading or tax to create a carbon price. Mr Whittell favours trading because taxation increase government general revenue which may or may not then be used to mitigate carbon emissions but trading is directed at reducing carbon emissions.
Hong Kong’s financial sector is increasingly interested in this area, said Christine Loh, CEO of Civic Exchange. “Hong Kong business has become much more aware of opportunities in environmental products, especially carbon trading. The interest shown from a wide number of sectors has grown measurably even over the past six months, and we can expect this to continue. As Hong Kong aspires to be an international financial centre, the development of asset classes in environmental products will be critical in fulfilling Hong Kong’s aspirations.”
“HKEx welcomed the opportunity to support today’s workshop on the latest developments in carbon trading and the implications for international financial centres such as London and Hong Kong,” HKEx Chief Executive Paul Chow said. “Today’s discussions offered interesting insights on Europe’s carbon trading experience and carbon trading’s potential in Asia.”
A spokesperson from the British Consulate General added, “This event demonstrates what a vital role the markets play in tackling climate change.”