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It is clear that society’s greenhouse gas emissions are costing the Earth but there is still little consensus on what the real price of carbon should be
Putting a price on carbon emissions is seen by many as a vital step in moving to a low-carbon economy
CARBON COSTS A growing array of energy transition processes and technologies depend upon carbon having a reasonable monetary value
DIFFERING VALUES Carbon has only started to attain a price point that makes decarbonisation worthwhile
KEY QUOTE We are not yet on track to stabilising climate, and that’s because carbon prices are not yet sufficiently stringent broadly across the globe
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The structure of the European Union’s 15-year-old carbon trading market is long overdue for an update if it is to keep pace with growing national ambitions to halt climate-destroying activity and geopolitical shifts
Border carbon adjustments (BCAs) are technically difficult to design and politically challenging to implement. If BCAs are going to succeed, the European Union (EU) will need to engage trade partners from the start, says E3G’s Johanna Lehne
The past 12 months have shown that even drastic changes to our daily lives are not enough to sufficiently reduce emissions and avoid catastrophic global warming. Carbon Capture and Storage (CCS) will now have to start playing a role, says Suzana Carp, political strategy director at Bellona Europe
Brexit, by excluding the UK from Europe’s carbon emissions trading system, has stripped British industry of the value of its carbon credits. Rescue options being considered by the UK government include linking back to the EU market, but also taking the risk of joining an immature multinational carbon trade cooperation
The introduction of a carbon price in the building sector will only encourage fuel switching and burden those least able to pay with the cost of decarbonisation. If implemented, it should be complemented with legislation to boost energy efficiency, says Monica Frassoni of the European Alliance to Save Energy
As major markets around the world add various forms of carbon tax, in the United States a country-wide price on carbon is a political non-starter
Facing the prospect of huge bills for emissions allowances by 2030, cement companies must act now to accelerate the decarbonisation of the industry, says Fleming Voetmann at FLSmidth
Carbon prices at sufficiently high levels can push firms to internalise the costs of greenhouse gas emissions while providing a long-term price signal to drive investments needed for decarbonisation. Emission trading systems and carbon taxes feature in a growing number of climate strategies, but even the most well-designed instruments must be accompanied by other policy measures if emissions reductions goals are to be reached
Carbon capture and storage may be needed to decarbonise highly polluting sectors such as steel production, but the power sector would be best advised to focus on renewables and efficiency given the significant costs of the technology
Once carbon has been captured, the next piece of the puzzle is storing it. One option being explored in Iceland is to mineralise the carbon so it forms as solid rock below the ground—providing a more permanent storage solution. With the growth of carbon markets around the world, the finances behind this plan are also looking solid
