A Study on the Carbon Market and Carbon Funds Development.

탄소시장과 탄소펀드 개발에 관한 연구

Kyoto Protocol is an international convention on concrete performance program for UNFCCC(United Nations Framework Convention on Climate Change), which regulate and prevent to global warming and officially came into effect on February 16, 2005. Kyoto flexible mechanisms, the agreed environmental system in March 1997 in the Third Conference of Parties in UNFCCC General Assembly, Emission Trading System(ETS), Clean Development Mechanism(CDM) and Joint Implementation(JI), are key policies related to environment. In advanced countries, greenhouse gas emissions should be reduced average 5.2% level compared to 1990 in total emissions during 2008-2012. World leading carbon market finished the trial on the EU ETS I greenhouse gas emissions trading system, EU ETS II is operated regularly after 2008. World Bank leads to make 'Prototype Carbon Fund(PCF)' in April 2004, which is the world first carbon fund and a representative public carbon fund type, World Bank operate various funds including present PCF. Thus, I would like to propose as follows in relation to this study: First, in the validity analysis of carbon funds, it would be needed to analyze the Emission Reduction Cost Efficiency(ERCE) of carbon. The ERCE is a break-even value which brings the Net Present Value(NPV) to zero. NPV approach is used among projects and it enables potential projects to be compared and evaluated the ERCE on the basis of the net present value of net future cash flows. Therefore, according to results of analysis, carbon funds should be developed and invested. Second, it would be necessary to allow of issuing bonds together with carbon funds, carbon finance etc. Third, carbon funds, it would be reasonable to have a relatively enough maturity in project and as a financial derivatives in the international financial markets, it is needed various types of transactions. Fourth, it would be needed to standardize the carbon emissions trading for more efficiently. Fifth, it would be necessary to establish and invest in various kinds of domestic and overseas global carbon funds, including governments, privates, governments and privates sectors. And it is also needed to establish the medium and long term plans for carbon funds. Sixth, it would be needed to foster the advanced trade mechanisms for carbon funds in the most effective ways. Finally, carbon funds should be used in harmony with international societies to reduce global warming as the social responsible investing funds and it should be contribute to sustainable development. In addition, it would seem that carbon funds should be studied on establishing the contributable standard of sustainable development in the future assignment.