Carbon Value

In order to encourage individuals to reduce carbon dioxide emissions a value has been placed on carbon. The more you produce the more you pay. Within the EU, the Emissions Trading Scheme provides a mechanism for capping total CO₂ emissions and generates a carbon value, as market participants are given an ‘allocation’ of CO₂ they are permitted to produce, and can buy from or sell to each other to balance their allocations with their requirements. To give investors the confidence to invest in low carbon solutions and thereby help to reduce emissions, it is necessary to have certainty that there will be a long-term value for carbon.