In 2009, the global carbon market was approximately $136 billion. It is estimated that a global carbon market of $2 trillion can be established by 2020 if a legal binding global climate treaty is signed as well as a federal emission trading system is established in the US.
In order to establish a strong carbon market in the US, “cap and trade” scheme was introduced under which a carbon emission limit (cap) is set for companies, which when unable to achieve, can buy allowances from other companies. But, this system is facing opposition from Republicans in the U.S. Senate and doubts persist whether the bill related to this system will pass this year. However, other regulatory measures and “cap and refund” system are seen as alternatives to minimize greenhouse gas emissions.
The US carbon market was worth $2.7 billion in 2009; less than 3% of the total carbon permits traded under EU’s program, which equaled $93.9 billion in the same year. Majority of the carbon market in the US is derived through a 10-state cap and trade program in the northeast, known as the Regional Greenhouse Gas Initiative (RGGI) as well as offsets market, which accounted for $74 million in 2009.
This analysis was taken from a research paper published by GlobalData, follow this link to download the full Research Paper for free.Tweet
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