With a powerful policy context, abundant competitive advantages as an international financial centre and a huge carbon market opportunity on our doorstep, Hong Kong should want to be a global hub for carbon trading.

This is the second article of a series on carbon markets. It is co-written with Jeff Huang, founder of AEX Holdings Limited, who is working to develop carbon and power markets in Hong Kong.

This is the first article of a series on carbon markets, and reflects on best practices for carbon price discovery and day-1 trading in respect of the China national ETS, including the importance of price certainty and transparency to effective financial markets. It is co-written with Jeff Huang, founder of AEX Holdings Limited, who is working to develop carbon and power markets in Hong Kong. A Chinese language version of this article first appeared on Caixin.

During the 2020 HK Policy Address, the Chief Executive delivered the magic words: “I now announce that the HKSAR will strive to achieve carbon neutrality before 2050.” Since then, we have been speculating what Hong Kong businesses should anticipate from the upcoming government strategies and measures.