Focus. Sustainable Finance
Economy, work and organisations
Competition and markets
Carbon Prices and Markets: The Solution to Climate Change?
To incentivize the energy transition, a growing number of governments throughout the world are implementing market-based mechanisms, for instance involving carbon prices and markets. These mechanisms, in which companies make voluntary commitments, have seen enormous growth in the last two years. Companies begin to perceive decarbonization not only as a threat, but also as an opportunity. The energy transition can be an opportunity to develop new business models and create value, orienting toward low-carbon emissions choices. This is a significant step forward: incentivizing companies to make low-carbon emissions choices will be the key to combat climate change. Carbon prices and markets are not the only tool, and cannot be the solution for all countries. However, they can provide the proper incentives and support the energy transition, provided they are used responsibly by businesses and equitably by governments.