Ahead of the COP 26 climate summit in Glasgow in 2021, most of the world’s economies set themselves net zero targets – the date by which their economies would become carbon neutral. But on returning from Scotland, those governments were faced with a challenge – how to turn a target date (of 2050 in most cases) into reality.
Their response has been to ramp up the use of demand and supply side regulatory levers in order to mobilise the massive private sector investment required to decarbonise. In the EU, the Fit for 55 programme incorporates over 14 separate but interconnected policy initiatives impacting all sectors of the economy, from industry to agriculture and transport. Most of these involved tightening standards or raising costs on EU companies – such as by increasing the price industry pays to emit carbon under the EU Emissions Trading System (ETS).
It is still early days. The EU CBAM starts with a light-touch transitional phase, running until the end of 2025, allowing all those impacted some time to get to grips with the new rules.
Source: citp.ac.uk
