ICAP: Global Emissions Trading Report 2022

Climate change is the defining challenge of this decade. Without a concerted effort to decarbonize economies around the world and reduce emissions, our collective goal of limiting global warming to 1.5°C or even 2°C will be out of reach. Governments and companies are responding to the climate emergency by raising ambition: setting new climate targets and pledging to reach net zero emissions by mid-century.

Emissions trading systems (ETS) play a key role in the challenge of this century: achieving net zero emissions by 2050. Government net zero commitments cover around 70% of global greenhouse gas emissions, but many are not supported by near-term policies. Achieving this long-term goal requires strengthening existing emissions trading systems. They are increasingly becoming the policy instrument of choice to drive decarbonization and will play a central role in achieving net zero emissions.

2021 is a critical year for ETSs around the world as jurisdictions take steps to meet their net zero emissions commitments. As of 2022, 25 systems are in force worldwide, with an additional 22 planned or under consideration. Domestic carbon markets currently account for approximately 17% of global emissions and have generated over $161 billion in auction revenues that can be used for further environmental protection measures and climate justice.

The 2022 ICAP report details the latest developments in emissions trading around the world. Policymakers and government advisors delve into the nuances and key lessons from the EU ETS, China’s national emissions trading system, California’s cap-and-trade scheme, and the UK ETS. Analysis from the Americas Carbon Pricing Platform and the International Energy Agency also sheds light on ETS experiences, which are becoming increasingly comprehensive.

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