The Carbon Market

Once a company has assessed its carbon liability and determined whether (and how) it will participate in emissions trading, it will have to decide which segment of the carbon market to enter. The carbon market is in its formative stage and is segmented by type of commodity and buyer motivation. In addition it is not likely to be fully liquid or integrated for some time. Although companies and countries have a great deal of experience in trading, market development is a process. The US SO₂ market, for example, took up to six years before it reached maturity. Given that trading infrastructure exists and trades have occurred since as early as 1996, it may not take as long for the greenhouse gas market to mature.79