According to Reuters article published on March 22, 2023, governments globally raised a record $63 billion from the sale of carbon allowances in emission trading systems in 2022, as many countries increased ambitions to cut pollution despite record high energy prices following Russia’s invasion of Ukraine, a report said on Wednesday.
Many countries and regions have launched emissions trading systems (ETS) to put a price on carbon dioxide (CO2) emissions and incentivise companies to invest in low carbon technology and help meet climate targets.
"Instead of weakening climate ambitions, the energy crisis pushed governments towards ending their fossil fuel dependency quicker, supported by policies like emissions trading," said Stefano De Clara, head of intergovernmental forum International Carbon Action Partnership (ICAP).
As of 2023 some 28 ETSs are in operation globally, covering around 17% of global emissions the report said.
Under an ETS, governments set a gradually decreasing cap on the amount of emissions that a sector, or group of sectors, can produce. They create carbon allowances for those emissions, which are auctioned, and companies must buy one for each tonne of CO2 they emit.
The $63 billion raised from allowance auctions in 2023 was up from $59 billion in 2022, the report said.
Prices in the EU ETS, the world’s most established scheme, rose to an average of $83 a tonne, up from $65 in 2021, the report showed.
EU countries and lawmakers agreed reforms to the EU carbon market last year which will cut emissions faster and start to phase down free allowances given to industry.
The allowance price in California and Quebec, which have linked schemes, grew to $28 in 2022 up from $22 in 2021.
In China’s ETS the average allowance price was $8 in 2022 up from $7 in 2021, the report showed.
