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| Emissions Trading market |
The Emissions Trading market is estimated to be valued at US$ 334.80 billion in 2022 and is expected to exhibit a CAGR of 24% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Emissions trading, also known as cap and trade, is a policy mechanism where a
cap is set on the total emissions of carbon dioxide or other pollutants.
Companies or other groups are issued emission permits and are required to hold
an equivalent number of allowances which represent the right to emit a specific
amount. Those below their emissions target can sell surplus allowances to those
who will exceed their target. This provides flexibility to affected companies
while also ensuring that the total amount of allowed emissions is not exceeded.
Market Dynamics:
Surging implementation of carbon trading programs across regions is expected to
drive the market growth over the forecast period. For instance, the European
Union Emissions Trading System is considered as the largest trading system and
has been implemented since 2005.In California also, the Global Warming
Solutions Act has initiated a carbon trading program since 2013. Another factor
fueling the market is growing prominence of pricing carbon indirectly as an
alternative to direct carbon taxes. This makes the emission reductions more
cost effective. Increasing adoption of emissions reduction goals along with net
zero commitments by countries and companies is also propelling the demand for
emissions trading mechanisms to achieve the targets.
SWOT Analysis for Emissions Trading Market
Strength:
- Established regulatory framework and policies designed to lower emissions are
driving the market's growth. Government initiatives to control emissions are
forcing companies to trade emissions permits.
- Standardized agreements and procedures enable efficient trading of emissions
credits between participants. This promotes transparency and reduces
transaction costs.
- Trading emissions allows companies to meet reduction targets in a
cost-effective manner while stimulating investment in cleaner technologies.
Weakness:
- Complex compliance processes and lack of harmonization across jurisdictions
increases administrative burden for participants. Different rules across
regions pose challenges.
- Market is still in a nascent stage in many parts of the world. Low
participation and liquidity hampers the market's full potential.
Opportunity:
- Tightening of emissions norms worldwide presents an opportunity for the
market to grow substantially. More sectors can be brought under the
cap-and-trade framework.
- Emergence of carbon offset programs related to forestry, waste management
etc. increases the tradable asset pool and scope of the market.
Threats:
- Changes in environmental policies and regulations across jurisdictions pose
uncertainty. Regulatory risks can impact compliance needs and trading
decisions.
- Economic slowdowns may lower the growth prospects as emissions reductions
become a lower priority during downturns.
Key Takeaways
The global Emissions
Trading Market Share is expected
to witness high growth, exhibiting CAGR
of 24% over the forecast period, due to increasing policy interventions by
governments to curb carbon emissions and transition to a low-carbon economy.
Regional analysis - Europe dominates currently with over half of the global
market share due to the well-established EU Emissions Trading System. Asia
Pacific region is expected to be the fastest growing market led by China's
national emissions trading scheme and commitments by other large economies like
India.
Key players operating in the Emissions Trading market are BP Plc, Royal Dutch
Shell Plc, Total SE, Chevron Corporation, ExxonMobil Corporation, Engie SA, RWE
AG, ON SE, Vattenfall AB, Gazprom, Mitsubishi UFJ Financial Group (MUFG),
JPMorgan Chase & Co., Goldman Sachs Group, Inc., Citigroup Inc., Barclays
PLC. These players are focusing on enabling trading of environmental assets
like carbon offsets and exploring opportunities in voluntary markets.
Read More,
https://www.trendingwebwire.com/emissions-trading-market/
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