WisdomTree has launched Europe’s first California carbon allowance exchange-traded product (ETP), ETF Stream can reveal.
The WisdomTree California Carbon ETP (WCCA) is listed on the London Stock Exchange and the Borsa Italiana and will list on the Deutsche Boerse on 20 April. WCCA has a total expense ratio (TER) of 0.49%.
The ETP will track the ICE California Carbon Allowance Futures via the Solactive California Carbon Rolling Futures TR index.
The California Capture and Trade programme is a key element of the state’s plan to reduce its greenhouse gas emissions by 85% - below 1990 levels – by 2045.
Revenues obtained via the California Carbon Allowances (CCAs) are used to fund a range of environmentally friendly climate change and mitigating initiatives.
It is the second-largest carbon allowance market globally, trading around $1.7bn per month in 2022, according to the Bank of America.
Nitesh Shah, head of commodities and macroeconomic research at WisdomTree, said: “California has laid out a path to cut emissions aggressively by 2045 and CCAs will play a larger role in the policy toolkit than ever before.
“The success of the European Union Allowances (EUA) ETS provides a great example of what happens when policymakers get serious about cutting emissions.”
It expands its carbon ETP range to two, sitting alongside the WisdomTree Carbon ETP (CARB), which currently houses $287m assets under management (AUM).
Alexis Marinof, head of Europe at WisdomTree, added: “WCCA removes many of the barriers investors face when allocating to this asset class and builds on WisdomTree’s heritage of bringing hard-to-access exposures to investors through ETPs.
“We are building a range of differentiated and complementary ETPs that allow investors to participate in the energy transition through thematic equities, commodities, or carbon allowances.”