The green mentality has prompted Merrill Lynch to roll out a set of indexes focused on carbon emissions credits, in the hopes that someday an exchange traded fund (ETF) or exchange traded note (ETF) will track them.

Jesse Emspak for Investor’s Business Daily reports that the indexes track the value of carbon emissions credits. In the European Union, companies are given credits that can be traded in a way that’s similar to futures and options. Buying more means a company can emit more, whereas buying less means emitting less.

The base index is the MLCX Global CO2 Emissions Index. It tracks emissions under the European Union’s emissions trading scheme and the Kyoto Protocol.

XShares Advisors also have an ETF in registration called AirShares. It will track carbon credits trading in Europe, but there’s no word as to when it will begin trading.

Green and clean energy ETFs performed well last year, but have had a rough time year-to-date, but some experts believe that the prospects for the sector are good and recommend investors take a long-term view when it comes to these vehicles.

Green ETFs already in the game:

• PowerShares WilderHill Clean Energy (PBW), down 27.2% year-to-date
• PowerShares Global Clean Energy (PBD), down 17% year-to-date
• Market Vectors Global Alternative Energy (GEX),  down 18.9% year-to-date

Tags: Green ETFs, Sector ETFs