Carbon Market

The carbon market is an environmental policy tool designed to reduce greenhouse gas emissions by assigning a cost to carbon dioxide emitted, thus providing economic incentives for reducing emissions and investing in renewable energy and energy efficiency. It operates on the principle of cap-and-trade, where a limit (cap) is set on emissions and entities such as companies or countries are granted emission permits or allowances. Participants can trade these allowances, buying additional permits if they exceed their emissions cap or selling them if they have succeeded in reducing their emissions below the cap, thereby fostering a market for carbon. This market-oriented mechanism aligns with several of the Sustainable Development Goals (SDGs), particularly SDG 13 (Climate Action), by directly incentivizing reduction in greenhouse gas emissions to mitigate climate change.

It also connects with SDG 7 (Affordable and Clean Energy) by encouraging shifts towards cleaner energy sources; SDG 9 (Industry, Innovation, and Infrastructure) by promoting the development of sustainable and innovative green technologies; and SDG 12 (Responsible Consumption and Production) by incentivizing companies to adopt more sustainable practices. Additionally, SDG 8 (Decent Work and Economic Growth) and SDG 11 (Sustainable Cities and Communities) are supported as the market drives job creation in new energy sectors and helps create sustainable urban environments.

Even more, the carbon market has a secondary benefit of contributing to SDG 15 (Life on Land) and SDG 14 (Life Below Water) by funding reforestation projects and conservation efforts, as healthy forests and oceans are significant carbon sinks that absorb CO2 from the atmosphere.

The efficiency of carbon markets, however, is often debated, with criticisms including the uneven allocation of emissions allowances, the potential for market manipulation, and the challenge of ensuring that the market translates into actual emission reductions rather than merely a shift of emissions across borders, known as carbon leakage. Despite these challenges, the carbon market remains a pivotal tool for leveraging the private sector’s ingenuity and resources in the global fight against climate change, acting as a bridge between economic development and environmental sustainability and ensuring that progress in one does not come at the cost of the other.


One Earth, Volume 5, 20 May 2022

This article proposes a feasible framework to operate a global market of blue carbon, which helps to mitigate climate change.
Contributing to SDGs 9, 12 and 13, this paper provides an in-depth analysis of the technologies available to reduce CO2 emissions in those sectors, and the implications for introducing consistent measures to deliver on emission reduction targets.
The latest price movement in the European carbon markets (EU ETS) has reached its all-time high of €40/tonne, which demonstrates how much uncertainty is currently present in the market. Contributing to SDGs 12 and 13, this white paper provides scenario-based impact analysis of the market stability reserve in the context of the EU ETS review.
This white paper examines whether increasing carbon prices are helping to reduce carbon emissions in the European Union. It directly relates to SDG 7 - affordable and clean energy, and SDG 13 - climate action.
This chapter addresses goals 6 and 9 by discussing the recent advances of carbon-based nanomaterials and nanocomposite membranes for effecctive treatment of emulsified oil/water mixtures.