Upcoming policy reforms to tighten global markets

California:

• Cap-and-trade carbon market since 2013
• Covers industry, power, transport and buildings, corresponding to 80% of the region’s emissions
• Finalizing scoping plan in 2022 to drive emissions 40% below 1990 level by 2030

EU:

• Cap-and-trade carbon market since 2005
• Covers industry, power and intra-EU aviation, corresponding to 40% of EU emissions
• Upcoming reforms include tighter emissions cap and new sectors
• Plans to start a carbon border adjustment mechanism (CBAM) to protect from carbon leakage

UK:

• Cap-and-trade carbon market since 2021
• Plans to align the carbon market to national goal of a 68% reduction in net greenhouse gas emissions from 1990 levels.

China:

• Baseline-and-credit carbon market since 2021
• Covers power sector, corresponding to 40% of the country’s emissions
• Looking to add new sectors to the market
• The 14th Five-Year Plan aims for an 18% drop in emissions per unit of GDP compared to 2020 levels

South Korea:

• Cap-and-trade carbon market since 2015
• Covers industry, power, transport, waste, public sector and buildings, corresponding to 74% of the country’s emissions
• Approved an emissions reduction goal of 35% below 2018 levels, from a 24.4% cut from 2017 levels previously. Now proposing to strengthen this to 40% below 2018 levels.