WisdomTree Launches Europe’s First ETP Investing in California Carbon Allowances

(Boursier.com) — WisdomTree has launched the first listed index product (ETP) in Europe offering investors exposure to California Carbon Allowance (CCA). WisdomTree California Carbon (WCCA) ETP is listed today on the London Stock Exchange and Borsa Italiana. Listing on Börse Xetra will take place on April 20, 2023. The management fee is 0.49%.

WCCA aims to track the price movement of ICE California Carbon Allowance Futures through the Solactive Carbon Emission Allowances Rolling Futures TR Index. WisdomTree California Carbon (WCCA) joins WisdomTree Carbon (CARB), a fully collateralized ETP offering exposure to European Union (EUA) carbon quotas totaling $287 million1 in assets.

California Carbon Allowances are issued by the California Air Resources Board as part of their Cap-and-trade Emissions Trading System (ETS), a marketplace that aims to reduce greenhouse gas (GHG) emissions. It is the first North American emissions trading system (ETS). It aims to enable the State of California to meet its GHG emissions reduction targets of 85% by 2045, which will match the level seen in 1990. A recent policy change aims to reduce GHGs by 48 % by 2030 compared to the level of the 1990s. This figure is significantly higher than the previous target of 40% and underlines the need to strengthen policy tools.

Nitesh Shah, Head of Commodities and Macro Research, WisdomTree, said, “California’s Emissions Trading System (ETS) is a key tool in the state’s plan to reduce emissions. It is one of the largest multi-sector emissions trading systems in the world, covering approximately 80% of California’s GHG emissions A portion of the revenue obtained through California Carbon Allowance (CCA) auctions ) is used to fund a range of environmentally friendly initiatives aimed at mitigating climate change. California has charted a path to drastically reduce emissions by 2045 where CCAs will play a bigger role than ever before. The success of the European Union Allowances (EUA) ETS is an excellent example of the solutions that can be found by policy makers when they take a serious look at reducing emissions.”