London, October 28 / BNA / The Global Financial Markets Association (GFMA) said today, Thursday, that countries must increase the use of carbon markets to achieve the Paris climate goals to limit the rise in global temperature to 1.5 degrees Celsius (2.7 Fahrenheit). .
World leaders will gather in Glasgow, Scotland, from Sunday for a United Nations climate summit, where negotiators will seek to set rules on how carbon markets will be used under the Paris Agreement, Reuters reported.
A report by the GFMA and Boston Consulting Group said only 20% of greenhouse gas (GHG) emissions are covered by a regulated price, and that existing schemes set prices often too low to make a real difference.
“Efficient carbon pricing in the economy is one of the most powerful tools to drive changing outcomes, treating greenhouse gas emissions as a time-limited resource,” said Steve Ashley, GFMA Chairman and Head of Wholesale at Nomura.
The Emissions Trading System (ETS) sets a cap on the amount of emissions that a sector or group of sectors can produce. It creates “carbon permits” for those emissions that companies can buy for every ton of carbon dioxide (CO2) they emit.
The report said the average cost of a ton of CO2 in current schemes is less than $5 and needs to be increased to $50-150 per ton by 2030 to meet the Paris targets.
Carbon prices at ETS in Europe, the world’s most well-established scheme, are trading at around €60 ($69.83) per ton, while China’s ETS, launched earlier this year, sets the carbon price at around €43 ($6.73) dollar).
A global carbon price of $100 per ton or more is required by 2050 to meet climate goals.
The World Financial Markets Association includes trade groups for the financial industry in Europe, Asia and the United States.
MI