Coming to a Close?, Quartz, Michael J. Coren & Clarisa Diaz
The price of carbon has never been higher. In April, a metric ton of carbon in Europe traded above $50 for the first time, kept rising, and smashed through the ceiling set over the last decade. Global carbon prices have followed suit, breaking national records from the US to China.
Efforts to fix a cost to carbon emissions have been around for more than a decade. Carbon prices remained low ranging from a few cents per ton to a few dollars in most cases. allowing businesses and governments to ignore them when making long-term investment decisions. coupled to economic growth, global emissions continued to rise.
Regulatory carbon pricing in both taxes and trading schemes are now crossing a threshold the analysts say was needed to trigger sustained reductions in greenhouse gas (GHG) emissions. While those prices are still the exception, rather than the rule, they are the bellwether of what is to come.
Two factors have pushed up the cost of carbon:
- A rebounding economy, and
- The renewed national pledges to cut emissions.
Global economies are recovering faster than expected pushed by unprecedented $15 trillion (and counting) in stimulus spending. Industrial activity and energy consumption have followed, sending atmospheric concentrations of carbon dioxide to unprecedented heights.