Carbon markets key for cutting climate mitigation costs: Refinitiv

The development of national carbon markets will be key for lowering the cost of climate mitigation efforts, the head of carbon research at Refinitiv, Haege Fjellheim, said on February 1. But she also expressed doubt that a single global carbon market would ever emerge.

Emissions trading systems are vital for countries to reach their climate targets, Fjellheim said, helping to encourage not only state but also private financing in reducing emissions. As mitigation costs fall, countries will in turn be able to raise their climate ambitions, she said.

Fjellheim was speaking at a webinar organised by the Gas Exporting Countries Forum (GECF), entitled Natural Gas in the Aftermath of COP26. She said the carbon market in Europe was an example for other countries and regions to follow, given its past success in driving emissions reductions. However, record high carbon prices this year have failed to deliver cuts in the power sector, as soaring gas prices have meant that coal is more competitive as a baseload capacity, even with the extra carbon tax.