<- Back
Impact ResourcesPerformance Resources
Impact on a global scale

Impact on a global scale

The European Union Emissions Trading Scheme (EU ETS) is the oldest and largest carbon pricing mechanism - it is a world pioneer. Many other jurisdictions are adopting similar decarbonization policy tools, inspired as they are by the EU example. 

Carbon knows no borders, the fight against climate change is a universal issue. Reaching the current state of the EU ETS has been a bumpy road, and the mechanism has undergone various phases with different reforms.

The lessons learned throughout the past decades have created a pillar model that other countries look to as an example. Currently, 36 jurisdictions have established their own carbon trading schemes, with many others working on implementing ETS projects. The EU has even established a task force dedicated to sharing its expertise and experiences in carbon pricing with other nations.

Beyond this, Europe sends a clear signal of the global urgency of climate action with the implementation of the Carbon Border Adjustment Mechanism (CBAM). This policy ensures that goods consumed in Europe, regardless of where they are produced, have their CO2 emissions priced according to the ambitious EU standards. Following Europe's lead, other jurisdictions, like China and the US, are now considering introducing their own CBAMs.

Neither global warming nor carbon pricing should be addressed locally; the EU ETS is leading the way in a collective, massive effort.

‍

Linked content

Do other countries have an emissions trading scheme (ETS)?

Do other countries have an emissions trading scheme (ETS)?

To combat climate change, more countries are adopting Emissions Trading Schemes (ETS), with 36 jurisdictions now using them. These schemes, along with carbon taxes, generated $104 billion in 2023 for environmental projects, but higher carbon prices are still needed globally to meet climate targets. The EU is pioneering carbon pricing, encouraging other nations to develop their own schemes and adapt them to local contexts to promote responsible investing.
What is the EU ETS diplomacy task force?

What is the EU ETS diplomacy task force?

The EU is sharing its carbon pricing expertise globally via a new task force to assist other countries in developing and harmonizing their own carbon markets. This initiative supports global climate goals and addresses the increasing international focus on carbon pricing mechanisms, including the EU's Carbon Border Adjustment Mechanism. The EU aims to help accelerate global decarbonization efforts through responsible investment and sustainable finance.
Does the EU ETS provoke carbon leakage?

Does the EU ETS provoke carbon leakage?

Carbon leakage, where companies relocate to avoid stringent climate policies, undermines emissions reduction efforts. The EU ETS combats this through free allowance allocation and the Carbon Border Adjustment Mechanism (CBAM), ensuring fair carbon pricing and encouraging global climate policy alignment for responsible investment. These sustainable finance policies aim to support investing in sustainable development and reduce the risk for impact companies.
What is the CBAM?

What is the CBAM?

The EU's Carbon Border Adjustment Mechanism (CBAM) ensures fair competition by imposing carbon costs on imports, preventing carbon leakage and encouraging global adoption of carbon pricing, which impacts sectors like cement, steel and fertilizers. The CBAM will require importers to report and pay for the carbon emissions embedded in their products, mirroring the EU ETS, with a phased implementation starting October 2023. This mechanism helps protect European industries investing in green technologies and promotes worldwide decarbonization.