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New Energy World
New Energy World embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low carbon technologies.
Carbon pricing in focus
3/5/2023
7 min read
Feature
With more options on the table for carbon pricing than ever, sustainability consultant Michelle Meineke asks if this choice will confuse or propel decarbonisation efforts later on.
Fully emerging from the mist of decades-long cynicism, carbon pricing is now widely accepted as a must-have mechanism in the push for net zero by 2050. However, implementation is still a mixed bag. About 23% of global greenhouse gas (GHG) emissions were covered by carbon pricing initiatives last year, at 11.86 GtCO2e, according to the World Bank. That figure can be read two ways.
One, it is laudable considering that the world’s first carbon trading market – the EU Emissions Trading Scheme (ETS) – launched 18 years ago in 2005. Some bruises undoubtedly blot the EU ETS’ track record. But it has been pivotal in working out the kinks of carbon pricing and galvanising nervy stakeholders as they entered the uncharted territory. The $84bn in revenue from global carbon markets in 2021, a 60% year-on-year climb, reflects the mounting appetite.
Some 70 carbon pricing initiatives are in play today – versus just two in 1990. These are an invaluable accelerant towards a global carbon price at some point in the move towards net zero in the next 27 years.