EU Carbon Price Hits a Milestone. How to Invest and What to Know.

The price of carbon permits––costs that factories and power plants need to pay when they pollute more than a certain amount––hit €100 per metric ton on the European market for the first time on Tuesday.

This marks a milestone for one of the key tools the European Union is using to meet its climate targets. Investors can profit from the carbon-trading market through some exchange-traded funds, but caution is warranted. Although prices should rise over time, and have taken off this year, they can be highly volatile.