Carbon Price Boom Attracts Investors to Emissions-Trading Market
WSJ — Investors have piled into new carbon-credit-trading funds, helping make the upstart market one of the best-performing commodities-related investments of the past year.
The price of carbon credits traded in Europe has jumped 135% over the past 12 months and recently hit a series of records as economic activity rebounded from pandemic lockdowns. Only lumber, driven higher by the housing boom, has proved a better commodities investment.
Tighter government controls, a bitter European winter and low inventories of liquefied natural gas—which required the need to burn more carbon-intensive coal—also played a role.
The soaring market has attracted investor cash from a collection of nascent carbon-only investment funds that seek to profit as economies transition away from fossil fuels. KraneShares Global Carbon ETF, launched in July 2020, has quickly attracted close to $400 million in investor money, most of those inflows this year. It trades under the ticker symbol KRBN.
For KRBN standard performance and top 10 holdings please click here. Past performance is no guarantee of future results. Diversification does not protect against market risk.