LONDON (Reuters) - The role of carbon markets and putting a price on emissions blamed for climate change is one of the major negotiating points at this year’s U.N. climate talks in Madrid.
While a global carbon market remains elusive, 46 nations and over 30 cities, states and regions now have a price on carbon dioxide emissions (CO2), covering just over 20% annual global greenhouse gas emissions, according to World bank data.
Carbon pricing can come in the form of a traditional tax or under a cap-and-trade scheme where companies or countries face a carbon limit.
If they exceed the limit, they can buy allowances from others. They can also sometimes purchase carbon offsets from projects that avoid emissions outside of the scheme, often from developing countries.
Below are some of the major carbon trading schemes around the world.
A national emissions trading system (ETS) to be launched in 2020 following several pilot schemes in provinces and cities including Beijing, Chongqing, Guangdong, Hunan, Shanghai, Shenzhen and Tianjin. They cover energy production and various energy-intensive industries.
The world’s largest ETS is mandatory for all 28 EU members, plus Iceland, Liechtenstein and Norway, covering power plants, aviation, energy intensive industries.
Covers the energy sector, mining and chemical industries.
Covers electricity generators, manufacturers liquid fossil fuels including petrol and diesel. Some forest owners are given free permits, others can voluntarily join the scheme.
Covers electricity, energy intensive industrials.
Covers around 600 of the country’s biggest emitters, collectively responsible for almost 70% of the country’s annual emissions.
The United States does not have a national ETS, but many regions and states use carbon pricing, such as California and states covered by the Regional Greenhouse Gas Initiative (RGGI) - Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont.
Sources: World Bank Group, International Carbon Action Partnership
Reporting By Susanna Twidale; editing by Emelia Sithole-Matarise