Emissions trading worldwide: 2023 ICAP status report

Carbon markets hold steady amid energy cost surges, finds the International Carbon Action Partnership (ICAP)’s Emissions Trading Worldwide Status Report for 2023.

• Prices in the world’s emissions trading systems ended 2022 largely unchanged on the year
• The global energy crisis pushes governments to double-down on decarbonization efforts, with emissions markets playing a key role
• Increasing focus on a more equitable transition and addressing burdens on vulnerable communities
• ETS auctions raised $63 billion globally in 2022, a new record

The world’s emissions trading systems (ETSs) were largely impervious to broader economic shocks in 2022, with allowance prices ending the year largely unchanged from the end of 2021. This came amid a global energy crisis, sparked by Russia’s war in Ukraine, which saw energy prices skyrocket and added to broader inflationary pressures.

Instead of retreating from climate ambitions as economic pressures piled up, policymakers around the world doubled down on their commitments and accelerated plans to decarbonize, using their ETSs to help, finds the 10th edition of ICAP’s Emissions Trading Status Report. Furthermore, ETSs are generating record level of revenues that can be used to both deliver further GHG reductions and to alleviate the burden on low-income communities and households, either directly via rebates or indirectly, such as funding energy efficiency improvements in state housing.