Carbon regulation

Advisory services for carbon regulation and climate neutralization

Emissions trading offers a framework to price carbon emissions and avoid the release of greenhouse gases where it is most efficient and low-cost. A bunch of regional carbon markets emerged, also outside of Europe; for instance in many states of the US, in Canadian provinces, in some Chinese cities and regions, and Tokyo.

Other countries use carbon taxes as regulatory instruments, e.g. South Africa, Mexico, or the scandinavian countries.

Currently, the European emissions trading scheme (EU ETS) obliges 11,000 facilities to cover every ton of carbon emissions with one certificate. Since the beginning of the EU ETS in 2005, the price for carbon dropped to low levels due to an unexpectedly modest economic growth and a oversupply of certificates. A reform of the system is ongoing and will be coordinated with the new EU climate targets for 2030.

A prompt tightening of carbon regulation can lead to stranded investments, i.e. investments into emission-intensive facilities and companies run profitability risks. Countries like France or Brazil are demanding the financial sector to disclose their risk exposure and risk management approach towards climate risks.

Allianz Climate Solutions brings together its long-term experience in the carbon regulation, advises on climate-related investments and regulation risks. Furthermore, we are responsible for the neutralization of the greenhouse gas emissions of Allianz Group. This is achieved with forest protection projects in Kenya and Indonesia as well as an energy efficiency project in India.

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