Carbon NewsCOP26: Global Carbon Market Deal Reached

COP26: Global Carbon Market Deal Reached

Leaders at COP26 have reached a deal to standardize the international carbon trading market. Some estimate that the new UN-supervised marketplace could be worth as much as $100 billion.

What is the carbon marketplace?

The carbon marketplace is where carbon credits are purchased to offset emissions through environmental projects (such as reforestation). One carbon credit equals one metric ton of carbon.

Companies use offsets when they do not have the technology needed to reduce emissions. This way, they can still operate in an environmentally friendly way while working to achieve net-zero.

Now, with a global standard in place, many expect the carbon marketplace to expand rapidly. It has boomed this year alone, reaching $1 billion (up from $300 million in 2018).

Experts predict the global carbon market could reach $22 trillion by 2050.

How will the global carbon trading market work?

There are two parts to this new agreement:

• The creation of a central system that will be open to public and private sectors; and,
• A separate, bilateral system that will allow countries to trade credits.

While some critics feel the carbon credits offered will be for low-quality environmental projects – Dirk Forrister, Chief Executive of the International Emissions Trading Association, said the outcome was “solid and ambitious,” leaving it up to the private sector to “channel green investment using these new market structures and accelerate the race to net zero.”

Why is this new system an improvement?

COP26 decision creates a global approach to standards. It will be the first-time nations have a united standard to go by – which is a significant win.

• It can help make sure identical emissions reductions aren’t claimed by numerous countries or organizations.
• Countries can now ensure that their deals are subject to the same standards across the globe.
• Companies will have a more difficult time fudging their green credentials through imported credits.

“Article 6 provides the rules necessary for a robust, transparent, and accountable carbon market,” said Kelley Kozier, Vice President for Global Climate at the Environmental Defense Fund and a former negotiator.

In addition to an improved credit marketplace, at COP26, over 450 financial institutions – representing 45 different counties, with nearly $130 trillion in assets – committed to investing green.

Progress is being made.



Most Popular



Ultimate Guide



Loading...



LATEST CARBON NEWS

A Battery ‘2X Better’ than Tesla’s Is Reshaping the $90B Home Power Storage Market

Disseminated on behalf of StorEn. Demand for home energy storage is booming, with up to 47% of US homes expected to have rooftop solar installations...

Why Madsen Will Work This Time: A Smarter Start for a Legendary Gold Mine

Disseminated on behalf of West Red Lake Gold Mines Ltd. The Madsen Mine, located in Ontario’s renowned Red Lake gold district, has a legacy of...

France’s New Law to Curb Fast Fashion Carbon Footprint: A Closer Look at SHEIN, Temu, and Inditex

The French Senate has approved a new legislation that puts strict rules on ultra-fast fashion brands like SHEIN and Temu. This bill bans ads...

BP Halts Indiana Carbon Capture Project Amid Safety and Economic Concerns

BP has indefinitely paused its carbon capture and storage (CCS) project in Indiana. The plan, aimed at making the state a hub for low-carbon...
CARBON INVESTOR EDUCATION

Planting Trees for Carbon Credits: Everything You Need to Know

As climate change intensifies, nations and industries are seeking innovative ways to cut carbon footprints. Carbon credits have emerged as a key tool in...

What is SMR? The Ultimate Guide to Small Modular Reactors

Energy is the cornerstone of modern life. We need electricity for healthcare, transportation, communication, and more. Many countries are choosing nuclear power because it...

What Is Carbon Dioxide Removal? Top Buyers and Sellers of CDR Credits in 2024

The world must remove 5–16 billion metric tons of CO₂ annually by 2050 to limit global warming to 1.5°C. But with emissions still rising,...

Top 5 Carbon ETFs for Sustainable Investing in 2025

Like stocks, investors can buy and sell Exchange-Traded Funds (ETFs) whenever the market is open. Often investing in carbon credits through ETFs offers a...