EU to step up efforts for more carbon markets worldwide

The EU's climate policy chief, Wopke Hoekstra, announced on Tuesday that the European Union intends to escalate diplomatic efforts to assist non-member countries in establishing carbon markets. This initiative aims to encourage international trade in CO2 emissions. The EU's Emissions Trading System (ETS), recognized as the world's largest carbon market with a traded value of approximately 751 billion euros ($804.47 billion) last year, mandates European power plants and industries to pay for each metric ton of emitted CO2.

Hoekstra emphasized that promoting the adoption of similar carbon trading schemes by countries outside the EU should be a focal point of Europe's climate change strategy in the upcoming years. Speaking at an event hosted by the think-tank Bruegel in Brussels, he outlined plans for a substantial effort to assist interested countries, either in adopting a system resembling the EU ETS or one with a slightly different design. Hoekstra highlighted the necessity of creating more carbon markets and emphasized the eventual need to interconnect these markets.

To support this initiative, the European Commission is set to launch a taskforce, offering to deploy personnel to aid in the establishment of carbon markets. Notably, China, California, and Britain already operate carbon markets outside the EU. However, challenges persist in linking these markets due to differences in CO2 pricing, design, and covered sectors. Hoekstra underscored the importance of connecting these markets, stressing that despite existing efforts, little progress has been made in facilitating the trading of CO2 emissions between countries with disparate carbon market schemes.

The European Union has stirred discontent among certain nations by announcing its intention to extend the scope of its carbon pricing initiatives globally.