Carbon Pricing: Harnessing the Power of Markets to Drive Climate Action

Climate Risk Podcast

Hear from Gordon Bennett, Managing Director at ICE, as we dive into theory and practice of carbon pricing and its important role in driving the transition to net zero.

Carbon pricing is the poster child of market-based solutions to climate change. The principle is simple: by assigning a cost to greenhouse gas emissions, we incentivize polluters to emit less, and to do so in the most cost-effective way.

But there’s a significant gap between the theory and practice. Currently, only 24% of global emissions – about 12.8 gigatonnes – are covered by pricing mechanisms such as carbon taxes or cap-and-trade. On top of that, just half a gigatonne was traded in voluntary markets last year. Clearly, there’s still a long way to go. In this episode, we explore the carbon pricing gap, including:

• Why it exists, what’s needed to close it;
• The integrity challenges facing voluntary carbon markets, and how to address them;
• And how central counterparties can help drive the transition by ensuring transparent, reliable pricing.

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Links from today’s discussion:

• The World Bank’s Carbon Pricing Dashboard: https://carbonpricingdashboard.worldbank.org/
• Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA): https://www.icao.int/environmental-protection/CORSIA/Pages/default.aspx
• GARP Climate Risk Podcast with Simon Sharpe: https://www.garp.org/podcast/five-times-faster-cr-240321
• The Oxford Offsetting Principles: https://www.smithschool.ox.ac.uk/research/oxford-offsetting-principles
• GARP Climate Risk Podcast with Mark Campanale: https://www.garp.org/podcast/net-zero-supply-side-issues-cr-220303

Speaker’s Bio(s)

Gordon Bennett, Managing Director of Utility Markets and Global Head of Environmental Markets, ICE

Gordon has been Managing Director at Intercontinental Exchange, Inc. (ICE) since February 2015. Mr. Bennett is responsible for the sales and business development of ICE’s global environmental portfolio, the world’s largest environmental marketplace.

He is a member of the Board of ICE Endex, ICE Futures Abu Dhabi, Spark Commodities and a member of the Strategic Advisory Board of BeZero Carbon. He contributes to a wide range of external environmental and energy market initiatives including a member of the Nature Based Solutions Taskforce of the Sustainable Markets Initiative, the Transition to Net Zero Working Group of the Climate Financial Risk Forum, the City of London VCM Steering Committee, the VCMI Stakeholder Forum, the Advisory Board of the University of Cambridge Energy Policy Research Group and was named Environmental Finance’s sustainable business leader of the year in 2022.

Prior to ICE, Gordon spent 12 years at the global energy broker, Spectron, joining as Group Financial Controller and latterly serving as Chief Executive Officer. He is a Fellow of the Institute of Chartered Accountants in England & Wales.