💥Global carbon markets value hit a record $909b last year 💥

Carbon dioxide removal (#CDR) is gaining more momentum than ever in the conversation on mitigating emissions. Just this past year, the value of traded global markets for #CO2 permits peaked at a record $909 billion (€850 billion).

Here are the facts:

📈 The amount of #permits traded in the world’s emissions markets dropped by 20% in 2022 compared to 2021, but the overall value of the market rose by 14% as the prices for permits were much higher than before.

🇪🇺 The EU’s Emissions Trading System (#ETS), representing 87% of the global carbon market, was valued at around €751 billion last year, up 10% from 2021.

💶 The price of carbon permits on the ETS averaged more than €80/tonne last year – 50% higher than the previous year.

⬇ The EU ETS may implement a reduction in the number of permits in 2023/24. Watch this space for updates.

What about the rest of the world?

💰 Prices in the UK and North American markets were also higher than in the previous year.

🗺 Two regional carbon markets in North America – the Western Climate Initiative, Inc. and the Regional Greenhouse Gas Initiative – were worth over €60 billion combined last year.

🇨🇳 #China's national emissions trading scheme (launched mid-2021) was worth €504 million last year, though it dropped by 61% from the previous year due to limited trading.

What does this all mean? Good and bad news:

👎 The bad news: A high carbon price is a sign that companies are not succeeding in cutting emissions fast enough and are instead relying on emission credits.

👍 The good news: Polluters actually have to pay for their emissions and - in the case of the EU ETS - more money is channeled back into the #greentransition through the EU #InnovationFund (financed through the ETS).

⚡ While the CDR market is just a small fraction of the global emissions market, it will likely grow significantly after 2030 when it will likely become part of the EU ETS #compliancemarket.

I’m curious to know what you think. What are some other countries you’d like to highlight in the global carbon market? What am I missing in my analysis? Let’s talk in the comments.

(Read more here: https://lnkd.in/dZKffit7)