XShares Advisors has launched an exchange traded product that provides exposure to the European carbon market while avoiding counterparty risk.
The AirShares EU Carbon Allowances Fund (ASO) is a commodity pool that provides investors with investment results tied to a basket of futures contracts of EUAs. An EUA is an entitlement to emit one metric ton of carbon dioxide equivalent that is transferable under the European Union Greenhouse Gas Emissions Trading Scheme (EU ETS).
According to XShares, the global carbon market is on track to top $100 billion in the near future.
Barclays introduced the iPath Global Carbon ETN (GRN) earlier in 2008. An ETN is a debt instrument and carries with it counterparty credit risk. The XShares product avoids credit risk by investing directly in futures contracts.
See the XShares ETF directory for a complete listing.