HomeCarbon CreditsMoody's Warns Carbon Intense Industries Will Be Hit Hardest

Moody’s Warns Carbon Intense Industries Will Be Hit Hardest

Moody’s report on the economic impacts of carbon pricing confirms what most thought: carbon-heavy producers and carbon-heavy consumers will be negatively impacted. However, those investing in carbon-neutral technologies will be poised for growth.

There are two distinct and practical ways that carbon pricing takes place:

• Tax on emissions put in place by governments; or
• Through carbon markets where carbon credits are bought and sold

The practice of carbon pricing has been endorsed by the International Monetary Fund, the World Bank, and the Organization of Economic Co-operations and Development. Currently, 40 national and 25 sub-national jurisdictions have put a price on carbon, with 21.5% of global carbon emissions covered by carbon pricing instruments. This is up from 15.1% in 2020.

Even China – the largest carbon emitter in the world – created its own carbon market. The global carbon market is expected to reach $22 trillion by 2050.

In a press release, Moody’s Vice President and Senior Analyst Anushka Shah said, “In an indication of growing commitment to decarbonization and mid-century net-zero emissions targets, policymakers globally are increasingly advocating carbon pricing systems.”

Right now, the average price for emissions is $2 per ton of carbon – which is not quite at the $25 per ton required per the Paris climate agreement. But governments and businesses are working on getting there. If anything, this report by Moody’s shows, it is truly in their best interest to do so.

According to the Federal Reserve, the total economic cost of a business-as-usual approach to climate change will be $2 trillion more than meeting the Paris targets by 2050 and $50 trillion more by 2100. So, while carbon pricing may seem costly to governments and industries now, the cost of not doing so is far more expensive in the long run.

No matter the economic impacts of carbon pricing, Moody’s said they are preferable to what will happen if the world fails to combat climate change. “The cost of inaction on controlling emissions will accumulate with much greater social and economic costs in the future.”

Most Popular

Xpansiv’s Key Carbon Market Achievements for 1st Qtr of 2023

For the first quarter of 2023, Xpansiv achieved significant results, particularly on its carbon market performance. Here are the key achievements. First up, the dominant...

Which Deserves a Carbon Credit – Nature or Technology?

The United Nations (UN) has drafted a document that will define a new global carbon market for years to come, which seems to favor...

Brazil’s Bill Will Allow Loggers to Earn $24M from Carbon Credits

Brazil’s Congress passed a bill that will make carbon credits available to private companies with forest concessions, serving a first step in regulating the...

Global Renewable Energy to Break Records in 2023, IEA Says

Global additions of renewable power capacity will increase by a third this year, says the International Energy Agency (IEA). In the IEA's 2023 Renewable Energy...

What are the Effects of Methane Emissions and Why Should We Care?

What are the effects of methane emissions? That’s the multi-million dollar question in the world’s battle over global warming as methane was often overlooked...

Carbon Credits and the Future of Sustainable Business: Exploring Best Practices

The trading of carbon credits can help entities and the world meet their climate goals by cutting carbon emissions and practicing sustainable business. While...

Revolutionizing Textile Recycling with HTC

A Virginia-based startup, Circ, has developed a unique hydrothermal processing technology for recycling blended textiles, like polyester-cotton blends. With fast fashion's emissions and environmental...

Carbon Credits and the Sustainable Development Goals: Aligning Climate Action with Global Priorities

Carbon credits from climate actions represent a crucial part of a strategy to mitigate climate change while supporting the global priorities on advancing sustainable...