International Carbon Markets
Carbon emissions trading is emissions trading specifically for carbon dioxide and other greenhouse gas emissions recognized by the Kyoto Protocol, calculated in tonnes of carbon dioxide equivalent or tCO2e).
Carbon trading is one of the ways countries can meet their Kyoto obligations to reduce carbon emissions and thereby mitigate global warming.
National and Regional Cap and Trade Systems
There are several national and regional trading schemes up into place, such as the EU ETS (European Union Emission Trading Scheme), California Cap and Trade Program, Tokyo Government Scheme, New Zealand etc. Other trading systems are currently emerging in China (7 pilot regional CO2 schemes) and several countries from South America.
South Korea launched a nationwide CO2 emissions trading scheme in early 2015, becoming the second largest carbon market, after EU ETS European CO2 market. At the same time.
The long term goal is to have an international carbon market in which all these CO2 trading schemes and mechanisms to be linked and inter-connect.
CO2 Market Trends
Carbon emissions trading has been steadily increasing in recent years.In terms of value, the World Bank estimated in its *State and Trends of Carbon Pricing 2023* report that the size of the carbon market reached approximately €194 billion, with transaction volumes rising to around 12.5 billion tons of carbon dioxide.
The long-term trend for major polluting companies remains focused on reducing fossil fuel consumption and adopting “low carbon” technologies. At the European level, new targets are set within the framework of the “Fit for 55” legislative package and the European Green Deal. These targets for 2030 include:
• Increasing the share of renewable energy to at least 42.5% of total energy consumption.
• Improving energy efficiency by 32.5%.
• Reducing CO2 emissions by 55% compared to 1990 levels.