According to the International Carbon Action Partnership, average allowance prices for CO2 emissions rose by over 40% in four of the world’s five largest carbon emissions trading systems (ETS) between January 2021 and January 2022, in a context of economic growth (raising fossil fuel demand and contributing to higher allowance prices) and stricter regulations on emissions.
Between January 2021 and January 2022, the monthly average allowance price for the European Union’s Emissions Trading System (EU-ETS) more than doubled from US$46/t to US$95/ton (in inflation adjusted 2022 US$ terms). Average price increased by 54% in the Regional Greenhouse Gas Initiative (RGGI, covering the US states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and Virginia) from US$9/t to US$14/ton, and by 46% in the California Cap and Trade Program, from US$19/t to US$28/t. Finally, allowance prices increased in the Korea Emissions Trading System (KETS) by 43%, from US$21/t to US$29/t.
Over the January-September 2022 period, uncertainty in global energy markets contributed to various trends: whereas average allowance prices remained broadly stable in RGGI, they declined by by 4% (US$1/t) in the California Cap and Trade Program, by 6% (by US$1/t) in the China ETS that was launched in 2021, by 37% (US$11/t) in the KETS and by 27% (US$26/t) in the EU-ETS.
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