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Carbon as an Emerging Tool for Risk Management

Carbon as an Emerging Tool for Risk Management

Tenke A. Zoltáni
Copyright: © 2011 |Pages: 20
ISBN13: 9781609605315|ISBN10: 1609605314|EISBN13: 9781609605322
DOI: 10.4018/978-1-60960-531-5.ch013
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MLA

Zoltáni, Tenke A. "Carbon as an Emerging Tool for Risk Management." Green Finance and Sustainability: Environmentally-Aware Business Models and Technologies, edited by Zongwei Luo, IGI Global, 2011, pp. 221-240. https://doi.org/10.4018/978-1-60960-531-5.ch013

APA

Zoltáni, T. A. (2011). Carbon as an Emerging Tool for Risk Management. In Z. Luo (Ed.), Green Finance and Sustainability: Environmentally-Aware Business Models and Technologies (pp. 221-240). IGI Global. https://doi.org/10.4018/978-1-60960-531-5.ch013

Chicago

Zoltáni, Tenke A. "Carbon as an Emerging Tool for Risk Management." In Green Finance and Sustainability: Environmentally-Aware Business Models and Technologies, edited by Zongwei Luo, 221-240. Hershey, PA: IGI Global, 2011. https://doi.org/10.4018/978-1-60960-531-5.ch013

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Abstract

Since 2005, when the European Union Emissions Trading Scheme (EU ETS) launched, green adoption in business and industry has been marred by fraudulent carbon credits, VAT swindlers and carbon cowboys, inefficiencies of a nascent market, and not least of all by legislative uncertainty. The disrepute afforded by these examples hindered low carbon growth and deterred emerging business models from adopting more carbon friendly practices. But, as this chapter argues, the shift toward liberal environmentalism has yielded a new generation of businesses seeking to incorporate carbon assets, emissions trading, and sustainability strategies across the value chain. Central to this shift is the notion of carbon as a tool for risk management in businesses, which occurred through the instrumentalisation of CO2 into a tradable asset. By utilising carbon as a financial instrument, businesses are able to manage project risk, market risk, and reputational risk more effectively. This chapter demonstrates this argument through industry examples and provides practical advice for businesses today.

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