Media Release by Monash University
A Monash Business School research project which monitors real-time carbon prices is now easily available to finance professionals and investors around the world, through a relationship with global media company Bloomberg.
The Real Carbon Price Index, created by the Monash Centre for Financial Studies (MCFS) in partnership with industry partners C2Zero and SparkChange, launched on the widely-used subscriber-only platform Bloomberg Terminal late last year.
This means the Index is now available for financial experts and investors around the world to easily access this authoritative, up-to-date and trustworthy source for global carbon price movements.
The Bloomberg Terminal is an essential tool used by professionals and policy makers to make wide-ranging financial and economic decisions.
The ultimate aim is for the Real Carbon Price Index to become the main reference point used by investors, policy makers and other finance professionals to monitor global carbon prices.
“It was always our aim to have the index distributed as widely as possible to reach maximum impact,” says Dr Bei Cui, one of the key researchers from MCFS.
“Climate change is the big challenge of our time, and the price of carbon is one way to combat climate change.
“We want to raise awareness and drive policy change for governments and investors.”
Since the Real Carbon Price Index’s launch, it has been used by institutions, organisations, and researchers to put a true price on carbon.
The index measures the global carbon prices, and it has become a reference point to understand how the fight against global warming is going.
“The Real Carbon Index shows the actual costs of carbon for companies, so for investors it’s a very useful tool in ascertaining its effect on company profitability,” Dr Cui says.
“It highlights the risk for companies within their portfolios which comes from carbon pricing. Investors also want to know a reference point for when they project future investment decisions.”
The carbon price varies widely across different jurisdictions in the world. Many countries, Australia included, do not have a price on carbon even though emitting carbon into the atmosphere is costly for the environment.
The Real Carbon Price index quantifies the price of carbon and how it changes over time.
Currently, the global weighted carbon price at US$22, which is considerably lower than the target price of US$75 as set out by the International Monetary Fund.
MCFS researchers are hoping that superannuation funds will use the index to understand climate change risk, the impact of a higher carbon price on their investments and the resilience of their portfolios.
The index as well as the regional sub-indices are updated by MCFS every week.
Bloomberg is running training sessions for their users and promoting it on its platform.
“The big picture is that we want more jurisdictions to adhere to a carbon price. Today only 70 jurisdictions have put a price on carbon. China is already doing it, but the Australian government still hasn’t,” says Dr Cui.
“We want to highlight that the price needs to go up and for governments to see how far they are lagging.
“We want to drive behaviour change for governments and for investors to understand the impact of carbon price on companies.”
