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Environmental Commodities

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Environmental Commodities

What Are They & How Can You Trade Them?,

5 min read
3 take-aways
Audio & text

What's inside?

Investors can trade a new financial asset: environmental commodities. 

Editorial Rating



  • Applicable
  • Background
  • Insider's Take


Environmental commodities offer intrepid investors a chance to participate financially in clean energy production and climate change mitigation, writes long-time trader Lawrence Pines in this illuminating explainer. He highlights environmental commodities’ history, types, governance, investment theses and market opportunities. Although getAbstract never offers investment advice, traders, investors and ESG champions may find this primer on commodities trading a useful resource.


The regulation of greenhouse gas (GHG) emissions creates a market for environmental commodities.

Governments, nonprofits and businesses are taking action against climate change by reducing their greenhouse gas emissions, expanding their use of clean and green energy, and limiting their exposure to fossil fuels. The initiatives are a mix of subsidies, credits and offsets, which together constitute the market for environmental commodities.

Effectively, these “nontangible energy credits” assign a value to the “right to pollute” or to the production of clean energy. A company with a large GHG footprint can purchase credits in the marketplace. Given their price discoverability, environmental commodities...

About the Author

Lawrence Pines is a lead writer at and a veteran trader.

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