Five months after officially leaving the European Union (EU), the UK recently launched its own CO2 trading market as the Government sets emissions reduction targets ahead of an important summit. United Nations climate change agenda later this year.
Emissions from a factory in Scunthorpe, UK. Photo: AFP/VNA The UK’s Emissions Trading Scheme officially became operational two weeks ago, replacing the UK’s participation in the EU’s common system. The UK government has announced that the new CO2 trading scheme will make a significant contribution to achieving the goal of being CO2 neutral by 2050. British Prime Minister Boris Johnson also plans to reduce emissions by 78%. pollutant emissions by 2035 compared to 1990 levels. UK prices start at around £50 ($71) per tonne of CO2, slightly higher than European prices. Meanwhile, the average selling price in the world’s third largest market, California (USA) is about 20 USD/ton. Observers say the supply of CO2 credits is dwindling in the UK to meet the Government’s environmental targets. Therefore, CO2 prices in this market are expected to continue to rise. According to Tim Atkinson, director of sales and brokerage at CF Partners, CO2 trading is one of the cornerstones of climate change policy. He considers this the most important tool to cut emissions in the power sector and heavy industries. For example, the UK has largely phased out the use of coal, largely because CO2 quotas make it too expensive to produce electricity this way. Meanwhile, other tools such as subsidies have fueled the boom of wind farms in the country. The efforts come as the UK, host of the G7 summit this month, is urging the world’s richest nations to facilitate for the “green” global economic recovery after the COVID-19 pandemic. London will also host the United Nations climate summit (COP26) in Glasgow in November.
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