Bloomberg New Energy Finance (BNEF)’s latest outlook report has predicted that the global carbon market is set to exceed $800 billion this year, marking a 5% year-over-year growth, even though trade volumes have fallen due to Russia’s war in Ukraine.
The expansion is an outcome of rising allowance prices driven by reforms aimed at boosting the potential of carbon markets. However, these gains have been somewhat diminished by concerns surrounding energy affordability and security.
While trading levels are dampened, BloombergNEF expects compliance carbon markets to remain an important tool for lawmakers this decade. New markets are set to be initiated in Brazil, Mexico and India, and regulators will continue to carry out supply-cutting reforms in existing markets, increasing prices.
