The global carbon market currently faces a deep demand crisis. A study carried out by GreenStream together with Climate Focus for NOAK, a working group under the Nordic Council of Ministers, analyses the status and outlook of global carbon markets.
Despite the current lack of ambitious global climate policy, various market-based approaches are emerging around the world, indicating increasing scope and fragmentation of the carbon markets.The consequent price fall reduces the private sector’s incentive to make low-carbon investments and thus increases the risk of locking in carbon-intensive infrastructure. The global carbon market relies on ambitious climate policy and consists of a mosaic of different schemes.
The study identifies measures and circumstances how new demand for carbon credits could be created to strengthen global efforts to reach the objective of limiting the global average temperature rise to 2°C, taking into account the trend towards fragmentation of carbon markets. The study concludes with options available for Nordic climate negotiators and policy-makers for boosting ambition and international credit demand.
The aim of NOAK is to contribute to a global and comprehensive agreement on climate change with ambitious emission reduction commitments. To this end, the group prepares reports and studies, conducts meetings and organizes conferences supporting the Nordic negotiators in the UN climate negotiations.
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