Carbon emissions

Expert Voices

Rising CO2 prices in EU to reduce emissions, add to market uncertainty

 A lignite-fired power station is pictured on August 15, 2018 in Schwarze Pumpe, Germany.
A lignite-fired power station is pictured on August 15, 2018, in Schwarze Pumpe, Germany. Photo: Florian Gaertner/Photothek via Getty Images

Over the past year, the European Union Emission Trading Scheme (EU ETS) has acted on the market to reduce the number of available CO2 allowances in its cap-and-trade system. Initiated in 2005, it is the largest such system in the world designed for reducing greenhouse gas (GHG) emissions, whereby businesses must purchase a permit at a set price in order to emit CO2.

What's new: The ETS' recent action, along with the increase in post-recession industrial productivity, has led to more than a 320% rise in CO2 allowance price, to around 22 euros per ton. This is good news insofar as CO2 emissions will likely decrease, but might jeopardize the competitiveness of businesses worldwide.

Top oil companies pledge 20% cut in methane emissions by 2025

Executives at OGCI panel
Press conference at the Oil and Gas Climate Initiative (OGCI) in Paris. Photo: Eric Piermont/AFP/Getty Images

The Oil and Gas Climate Initiative (OGCI), a group of top oil companies that now includes ExxonMobil and Chevron, has committed to a 20% cut in methane emissions by 2025, reports Reuters.

Why it matters: Per the Environmental Defense Fund, methane is 84 times more potent than carbon dioxide as a heat-trapping gas in the first two decades of its release. The announcement by OGCI is another sign of how America’s biggest oil companies, under pressure from investors and lawsuits, are joining most other U.S. corporations in working to reduce greenhouse gas emissions.