Emissions trading, also known as cap-and-trade, is a market-based approach to controlling pollution by providing economic incentives for achieving reductions in the emissions of pollutants. It works by putting a limit or cap on the total amount of a specific pollutant that can be emitted by specified sources. The cap is then reduced over time so as to achieve environmentally enhanced results. Sources can buy emissions allowances and sell them to others, ensuring that emissions reductions are achieved in the most cost-effective way.

The global Emissions Trading market is estimated to be valued at US$ 334.8 Bn in 2023 and is expected to exhibit a CAGR of 6.8% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:
Stringent regulatory policies and government initiatives to curb carbon emissions are anticipated to drive the growth of the emissions trading market over the forecast period. For instance, the European Union Emissions Trading Scheme (EU ETS), launched in 2005, is the largest multi-country, multi-sector emissions trading scheme in the world and has helped reduce emissions in the EU by over 2 billion tons in the phases 1 and 2. Additionally, rising awareness about the role of carbon emissions in climate change is also expected to boost the demand for emissions trading. However, lack of a global carbon pricing policy is likely to hamper the market growth. Nonetheless, emergence of blockchain technology based emission trading platforms and digitalization of carbon credits are expected to present lucrative opportunities for market expansion.

SWOT Analysis

Strength: Emissions trading systems provide flexibility and lower overall compliance costs for companies to meet emission reduction targets. By putting a price on carbon, emissions trading incentivizes polluters to reduce emissions in the most cost-effective way. It also drives innovation in low-carbon technologies.

Weakness: Credibility and environmental integrity issues can arise if the cap is not stringent enough or allowances are freely allocated rather than auctioned. There is also a risk of carbon leakage if stringent measures are not taken globally. Monitoring, reporting and verification of emissions remains challenging.

Opportunity: Growing international cooperation on climate change and adoption of carbon pricing mechanisms globally present opportunities for emissions trading markets to expand. The increase in corporate emission reduction pledges also opens up compliance demand. New digital technologies could help address challenges in tracking and verifying traded credits.

Threats: Geopolitical tensions and lack of coordinated global climate policies pose threats if they undermine international linking of trading systems. Public opposition to pricing carbon could slow scaling up of emissions trading. Economic downturns may temporarily lower compliance demand.

Key Takeaways

The Global Emissions Trading Market Share is expected to witness high growth over the forecast period of 2023 to 2030. Supported by stringent emission regulations worldwide and rising carbon prices, the market size is projected to reach US$ 334.8 billion by 2024.

Regional analysis: The European Union Emissions Trading System currently dominates as the largest mandatory emissions trading market globally. China is also emerging as a major trading hub with the expansion of its national emissions trading scheme. Together, the EU and China accounted for over 95% of the global carbon market in 2021. The Asia Pacific region is expected to be the fastest growing regional market led by growing carbon pricing initiatives in countries like Japan, South Korea and others.

Key players related content: Key players operating in the Emissions Trading Market are Johnson & Johnson Services, Inc., Baker Hughes Company, Halliburton Company, Schlumberger Limited, Weatherford International plc, National Oilwell Varco, Inc., Saipem S.p.A., Transocean Ltd., and Ensco Rowan. These companies, among others, have expertise in providing emission reporting, certification and trading services to organizations across sectors to help them meet regulatory compliance.

For more insights, Read- https://www.ukwebwire.com/emissions-trading-market-demand-share-analysis/