Emergence of big carbon markets

Global carbon prices are on the rise

With governments escalating climate policymaking, we believe carbon pricing is the best gauge of the stringency and efficacy of such policies.

Many companies face ambitious climate targets.

They need to reduce their own emissions and remove CO2 from the atmosphere by purchasing high-quality carbon credits. ~$ 1 trillion in notional value (including futures and options).

The EU ETS is the most liquid market, with trading turnover nearly 10x the annual emissions cap, and accounts for 90% of the global carbon trading value.

The California cap-and-trade market is the second most liquid but is much smaller and lower in price.

UK ETS is picking up in volume despite having just launched in May 2021.