Author(s): Working Group on Carbon Pricing and Markets
Year: 2025
Pages: 56
ISBN: 1-56708-191-6

The report, led by Adair Turner, Chair of the Energy Transitions Commission and former Chairman of the Financial Services Authority, examines ways to address climate change and achieve net-zero emissions before it becomes too costly and too unmanageable. Since the 2015 Paris COP 21 Climate Conference, there has been a rising global consensus to achieve rapid reductions in global emissions to limit global warming below 2 °C, however progress continues to fall far short of what is needed.
 
The Group of Thirty report considers the role carbon pricing (whether via emissions trading schemes or carbon taxation) should play in decarbonization, the extent to which carbon pricing approaches need to be internationally coordinated, and how to use carbon credit trading to support CO2 removals.
 
The G30 Working Group on Carbon Pricing and Markets offers key recommendations on carbon pricing and international coordination:
 
1. Countries should use carbon pricing as the primary driver of decarbonization in the hard-to-abate sectors, such as long distance transport and heavy industry.
 
2. Through international coordination, carbon pricing should ideally be imposed at a common level across countries.
 
3. If international coordination is unsuccessful, there is a strong case to use Carbon Boarder Adjustment Mechanism (CBAMs) along with domestic carbon pricing to help abate emissions across their supply chains.
 
4. Major developing countries should respond to the EU’s CBAM by introducing significant carbon prices to their own heavy industry sectors.
 
5. Portions of global carbon taxes or CBAMs proceeds should be invested in mitigation, adaptation, or resilience in low income countries most vulnerable to climate change.
 
In addition, the report also stresses the importance of carbon removals via carbon credit markets. To meet global net-zero targets, companies should continue to purchase carbon removal credits and play a role in funding removal investments. Furthermore, companies need to have a focused role for reduction credits and shift toward an increasing percentage of removals over time, prioritizing supply-side integrity across all project based markets. The working group also recommends an increase in credit quality standards, reputational incentives, and investment in high potential sectors for credit purchase, such as financial institutions, professional services, and technology.
 
As the planet continues warm, it is time to examine the economic costs of building a zero-carbon economy in the most cost-effective manner while minimizing negative externalities. The report advocates carbon-pricing through international coordination and cooperation as an optimal policy instrument, especially when coupled with strong carbon credit markets and prioritization of carbon removals in hard to abate sectors.
 
To read the full press release on the report, click here.
 
To watch a recording of the G30 Special Report Webinar, please click here.

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