Nations have committed to reducing greenhouse gases by 45 per cent by 2030, towards an eventual goal of net zero by 2050.
The second method is where the term “trading” in carbon trading comes in, in what is commonly called the “cap and trade” system.‘CAP AND TRADE’ SYSTEM The scheme covers some 10,000 power stations and factories, as well as airlines, in all countries within the bloc, plus Iceland, Liechtenstein and Norway.A tree is surrounded by solar panels in Los Arcos, Navarra Province, northern Spain, Friday, Feb. 24, 2023. Spain is building on its reputation in renewable energy to position itself as Europe's future leader in green hydrogen.
Each year, the cap also gets stricter and the shrinking pool of allowances gets more expensive, incentivising polluters to decarbonise.In the last ten years, it has crept up from €23 per tonne. The price peaked at €98 last August.Critics say carbon trading is great in theory, but there are drawbacks in practice.