ETF Securities has launched what it claims is the world’s first carbon exchange traded commodity on the London Stock Exchange, offering investors the opportunity to gain direct exposure to the carbon emissions allowance futures market.

The ETF Securities Carbon ETC is designed to track the price of carbon emissions allowance futures and offer investors a total return, that is the return an investor can earn by holding a long only, fully collateralised position in commodity futures.

Each ETFS Carbon is initially equivalent to one emissions allowance, which bestows upon the holder the right to emit one tonne of CO2 or the equivalent. It will trade on the LSE in both Euros and British pence, and each will begin trading at about €18.37 (£14.74), ETFS said.

ETFS chief operating officer Nik Bienkowski said: "ETCs were designed to be simple and accessible tools for all types of investors.Currently most investors cannot invest in carbon emissions allowance futures due to limited market access, but our response to this problem in the form of ETFS Carbon creates a practical and accessible answer for investors."