Carbon Markets, Carbon Capture and Climate Finance

Carbon dioxide has no natural price. Every attempt to give it one — a cap-and-trade market, a tax, a tax credit for capturing it, a voluntary credit bought by a company with a net-zero pledge, an aid flow from rich countries to poor ones — is a policy construct, and its value to an energy business lasts exactly as long as the policy does. The constructs are now large. The EU Emissions Trading System (EU ETS), the oldest and biggest, put a price on ~40% of the EU's emissions and traded mostly between ~€60 and ~€100 per tonne of CO2 from 2022 to 2026, at ~€82–89/t in October 2026 (ICE Endex prices, reported); from 1 January 2026 its Carbon Border Adjustment Mechanism (CBAM) began charging importers of steel, aluminium, cement, fertiliser, hydrogen and electricity for their embedded carbon. In the United States there is no federal carbon price, but there are state markets (California, Washington, the north-eastern RGGI) and a federal tax credit, 45Q, worth $85 per tonne stored geologically and $180 per tonne for direct air capture — kept, and in one respect enlarged, by the July 2025 law that cut most other clean-energy credits (verify against statute). The voluntary carbon market, where companies buy offsets, shrank after investigations in 2023 found that many rainforest credits did not represent real reductions, and is now rebuilding around integrity labels, removals and the Paris Agreement's new crediting mechanism. And climate finance — the money that is supposed to flow to developing countries — reached a new headline goal of $300bn a year by 2035 at COP29 in November 2024 just before the United States left the Paris Agreement. This section explains how compliance markets work and who wins and loses from them, CBAM and its trade fights, US state programmes, the voluntary market and its integrity scandals, carbon capture and storage (CCS) and its record, direct air capture, methane rules, and climate finance flows to emerging markets, with Africa's position in each.