An airless[1] netherworld that hovers uncomfortably between financial instruments — it isn’t those, because there is no credit component — crypto — it isn’t that because it’s government sponsored and doesn’t rely on breathless credulity about computer programming — and commodities — it isn’t that because you can’t eat, burn, or build a bridge out of carbon certificates.
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EU Emissions Allowance Transaction Annex to the 2005 ISDA Commodity Definitions
Top Trumps®Financial Weapons of Mass Destruction®
Emissions Allowance
“Wanna stop frying the planet? Start here. Will it help? Who knows? The forward curve is in contango: who cares!”
| Docs |
Take your pick: IETA, ISDA or even EFET: none of them good. But at least you have flexibility in mediocrity |
4
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| Amendability |
Nope. The EU can amend them, but you can’t. |
0
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| Collateral |
They aren’t anyone’s obligations as such. In fact, they’re more like a sort of unofficial, made up, (hush) crypto. No credit risk! |
DNA
|
| Transferability |
With an account at the Union Registry, sure! |
7
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| Leverage |
Not unless you do a CEmO, and we just made that up. |
0
|
| Fright-o-meter |
Not directly scary as long as there is an EU with Greta Thundberg in it, but global warming is going to lead to Armageddon so, you know, indirectly. |
5
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See also
References
