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Climate policy and carbon markets guide

Climate policy determines who must cut emissions, who pays for pollution and which claims or carbon credits can be used.

Climate policy determines who must cut emissions, who pays for pollution and which claims or carbon credits can be used. This hub connects the international agreements to the market, trade and sector rules that put them into practice.

Choose the route that matches your question. The Paris Agreement and COP31 guides cover international negotiations. The market route follows Article 6 and carbon pricing, including the European Union Emissions Trading System 2 (EU ETS2). The trade and transport route covers border rules, aviation and shipping. The UK and European route follows targets, delivery plans and climate risk.

Choose where to start

Browse the complete climate policy guide directory

All climate policy guides

Guide Best for What it helps you understand
Paris Agreement and US withdrawal Climate diplomacy and policy risk Why the US keeps leaving Paris, why UNFCCC withdrawal matters, and how climate diplomacy affects trade, finance and carbon markets.
Article 6 of the Paris Agreement Carbon market accounting and credit buyers How Article 6.2, Article 6.4, corresponding adjustments, CORSIA authorisations and voluntary carbon market claims connect.
Corresponding adjustments explained Carbon credit buyers and claims reviewers Why host-country authorisation, Article 6 accounting and public claim wording decide whether the same tonne is counted once.
COP31 Antalya 2026 COP summit watchers and policy-risk readers What the Türkiye-Australia arrangement, US withdrawal, fossil fuel roadmap, climate finance and Article 6 mean for the next UN climate conference.
UK International Climate Finance Strategy 2026 Climate finance, COP and sustainable-finance readers How the UK is combining about GBP6 billion of aid with GBP6.7 billion of wider public finance, and why delivery now matters more than headline finance language.
New climate finance goal explained Climate finance, COP31 and development-finance readers What the developed-country-led $300bn goal and wider $1.3tn effort mean, what can count and how to judge delivery.
NDC 3.0 and the 2035 emissions gap COP31, national-target and Paris Agreement readers How the latest 2035 climate plans compare with the emissions cuts associated with 1.5°C and 2°C pathways.
Loss and Damage Fund explained Climate-finance, COP31 and vulnerable-country policy readers How the first $250m funding window works, who can access it and what separates a pledge from a disbursement.
Just transition mechanism explained COP31, jobs, industry and climate-policy readers What COP30 agreed, how the mechanism differs from the existing work programme and what COP31 must decide before it can operate.
COP31 electrification target explained Energy-system, grid and climate-policy readers Why the 35% by 2035 target matters for final energy demand, transport, buildings, industry, grids and finance.
Seventh Carbon Budget explained UK net-zero delivery and policy watchers What the 2038 to 2042 carbon budget, 535 MtCO2e cap and 87% by 2040 signal mean for the UK net-zero pathway.
Carbon Budget and Growth Delivery Plan: heat and buildings UK buildings, clean heat and investment-policy readers Why the 2026 heat and buildings investor factsheet is a market signpost, not proof that retrofit, clean heat and finance are moving at carbon-budget pace.
UK emissions reductions 2026 UK emissions progress and sector evidence What the latest provisional emissions figures show, where the UK has made real progress, and why transport, buildings and delivery risk still matter.
UK heatwave 2026 climate risk Extreme heat, adaptation and infrastructure-risk readers What the provisional June temperature record says about climate attribution, heat stress, physical risk, public infrastructure and adaptation policy.
Urban greening for climate adaptation Urban heat, surface water and planning readers How trees, parks, rain gardens and permeable surfaces can reduce local exposure, and what to measure after planting.
Local Nature Recovery Strategies Planning, biodiversity net gain and land-management readers What England's local habitat maps contain, how they affect planning and the statutory biodiversity metric, and what publication does not deliver by itself.
England's 30by30 delivery plan Nature policy, protected-land and land-management readers Why 7% of England counts today, what the wider 32% potential figure represents and how land moves through the Gold, Silver and Bronze tiers.
School Streets in England Local transport, air-quality and active-travel readers What the evidence says about traffic reduction, displacement, air quality and walking or cycling around school gates.
UK ZEV mandate explained UK transport, charging and industrial-policy readers How electric vehicle sales targets, hybrids, credits and reported 2030 changes affect the net-zero delivery signal.
Global EV Outlook 2026 explained Electric vehicle, oil-demand and charging readers What the IEA's 2026 electric car sales, charging, battery and oil-displacement data say about the transport transition.
EU 2040 climate target explained EU climate law, carbon-market and post-2030 policy readers What the 90% target, 85% domestic floor, 5% carbon-credit clause, removals and European Union Emissions Trading System 2 (EU ETS2) delay mean.
EU CBAM explained Importers, exporters and supply-chain teams How the EU carbon border mechanism turns embedded emissions data into customs, supplier-evidence and certificate exposure.
UK CBAM 2027 Importers, manufacturers and supply-chain teams How carbon border rules can affect cement, steel, aluminium, fertilisers, hydrogen and other emissions-intensive imports.
UK CBAM Carbon Price Relief Import, customs, finance and supplier-evidence teams When an overseas carbon price can reduce UK CBAM liability, what must be verified and how HMRC calculates the effective price.
EU ETS explained Businesses and carbon price readers How Europe's cap-and-trade system creates a regulated carbon price signal.
EU ETS reform 2026 Industry, carbon-market and post-2030 policy readers How the Commission proposal changes the cap, free allocation, industrial funding, permanent removals, waste and international transport after 2030.
UK ETS explained UK compliance, shipping, waste and carbon-price readers How the UK carbon market works in 2026, including allowance prices, maritime expansion, waste monitoring and EU linkage talks.
California cap-and-invest explained US policy, compliance-market and carbon-price readers How California's cap, joint auctions with Quebec, allowance allocation, offsets and cost controls work through 2045.
EU ETS2 explained Fuel suppliers, policy watchers and cost-risk readers How the EU's separate carbon market for buildings, road transport and smaller industry works from 2028.
Open Coalition on Compliance Carbon Markets Carbon-market policy watchers Why the EU, Brazil and China initiative is really a test of carbon market coordination, accounting and integrity.
IMO Net-Zero Framework explained Shipping, freight and climate-policy readers How global shipping's fuel standard, emissions pricing mechanism and one-year adoption delay could reshape maritime decarbonisation.
EU ETS vs UK ETS UK and European compliance readers How the two emissions trading systems compare after Brexit.
CORSIA aviation carbon market guide Aviation and carbon credit readers How aviation offsetting rules affect eligible credits, buyer demand, Article 6 accounting, SAF and carbon market quality.
Carbon prices guide Market watchers and procurement teams How voluntary credits, regulated allowances and aviation-linked price signals differ.
Carbon Market Intelligence Dashboard Carbon market and policy readers A source-backed read across compliance markets, Article 6, CORSIA, registry evidence, removals delivery, claims rules and dated price context.
Carbon market update July 2026 Carbon market and policy readers What the latest tracker data says about visible prices, CORSIA, Article 6, voluntary credit boundaries and removals.

Current COP summit to watch

COP31 Antalya 2026 is the live anchor for this policy cluster. It tracks the next United Nations climate conference, the unusual Türkiye-Australia leadership structure, the US withdrawal context, unresolved COP30 fossil fuel language, climate finance delivery and Article 6 carbon market rules.

Six narrower COP31 owners cover the main specialist questions: the new climate finance goal, NDC 3.0 and the 2035 emissions gap, the Belém Mission to 1.5 implementation report, the Loss and Damage Fund, the just transition mechanism and the COP31 electrification target.

Together, those pages separate the summit's headline politics from the delivery questions that readers will need during the conference: who pays, what national plans add up to, whether vulnerable countries can access support, how workers and communities are treated, and whether electrification has enough grid, finance and policy machinery behind it.

Why climate policy matters for carbon markets

Carbon markets do not operate in a vacuum. They are shaped by national climate plans, emissions trading systems, border carbon rules, aviation frameworks, Article 6 accounting and buyer confidence. A policy change can alter which credits are eligible, which imports face a carbon cost, which sectors report emissions and which claims companies can make safely.

For businesses, that means climate policy is not only a public-affairs topic. It can affect procurement, reporting, supply-chain data, product pricing and customer requirements. For investors, it can affect transition risk, carbon-intensive assets, clean-technology demand and long-term policy volatility.

The most useful way to read climate policy is to separate the layers. International agreements set the direction and reporting architecture. National and regional rules turn that direction into taxes, trading systems, import costs, product rules or disclosure requirements. Voluntary markets then respond to buyer demand, claim risk and the quality expectations created by those public rules.

The policy layers to understand

Layer What it does Relevant guide
International climate agreements Set the framework for national targets, reporting, cooperation and climate negotiations. Paris Agreement and UNFCCC guide
National carbon budgets Turn long-term climate targets into legally bounded five-year emissions limits. Seventh Carbon Budget explained and UK emissions reductions 2026
Regional climate law Turns long-term net zero goals into legally binding intermediate targets and post-2030 policy direction. EU 2040 climate target explained
Carbon pricing systems Create prices for emissions through allowances, caps, auctions or compliance obligations. EU ETS explained, EU ETS2 explained and Open Coalition on Compliance Carbon Markets
Border carbon rules Apply carbon costs or reporting requirements to selected imported goods. EU CBAM explained and UK CBAM 2027
Aviation market rules Set eligibility and reporting rules for international aviation offsetting. CORSIA aviation carbon market guide, CORSIA vs EU ETS and CORSIA Phase 1
Shipping fuel and pricing rules Set fuel-intensity, emissions pricing and transition-finance rules for large ocean-going ships. IMO Net-Zero Framework explained
Carbon credit accounting Determines whether a credit is counted once, authorised by a host country, or suitable for a specific claim. Article 6 explained, corresponding adjustments and CORSIA eligible credits

How Paris connects to CBAM, ETS and CORSIA

The Paris Agreement does not directly set a carbon price for a company or tell an airline which credits to buy. Its importance is broader. Paris created the current framework for national climate plans, transparency and international cooperation. Those national plans and cooperation rules then influence the policy instruments that businesses actually see.

CBAM (Carbon Border Adjustment Mechanism) is one example. A carbon border mechanism is not simply an environmental slogan. It is a trade policy response to the problem of carbon leakage, where production can shift to jurisdictions with weaker carbon pricing. That is why CBAM sits between climate policy, customs, industrial policy and supply-chain data. For the EU system, read CBAM explained; for the UK system, read UK CBAM 2027.

Emissions trading systems are another example. The EU ETS (European Union Emissions Trading System), EU ETS2 and UK ETS (UK Emissions Trading Scheme) translate emissions limits into allowance markets. A covered company does not just read a climate target. It faces a compliance system, a price signal and reporting duties. When allowance prices change, the effect can run through power prices, industrial costs, fuel prices, investment decisions and procurement.

CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) shows the link with carbon credits. International aviation is difficult to decarbonise quickly, so the aviation system uses eligible emissions units alongside fuel efficiency, sustainable aviation fuel and operational improvements. Eligibility rules matter because they influence which credits are accepted, which programmes are trusted and how Article 6 double-counting questions are handled.

The IMO Net-Zero Framework is the shipping equivalent to watch. It is not a voluntary offsetting scheme. It is a proposed global fuel standard and emissions pricing system for large ocean-going ships, with a dedicated fund and lifecycle fuel-intensity rules.

Key questions to understand

  • Which climate agreements create formal reporting and target-setting obligations?
  • How do emissions trading systems differ from voluntary carbon credits?
  • When can carbon border rules affect importers outside the jurisdiction that created them?
  • How does CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) link aviation compliance with carbon credit eligibility?
  • Why does Article 6 accounting matter for international carbon market transfers?
  • How can policy volatility affect company claims, supplier requirements and investor risk?

What businesses should watch

For companies, the practical question is not only whether a policy exists. It is whether the policy changes data requirements, costs, customer expectations or public claims. Importers may need better product-level emissions data. Airlines and aviation suppliers may need to understand CORSIA eligibility. Carbon credit buyers may need to check whether a credit supports the claim they want to make. Larger companies may pass climate data requests down their supply chains, affecting smaller suppliers that are not directly regulated.

Start with the policy that touches the transaction. If the issue is imported steel, UK CBAM and EU CBAM are more relevant than voluntary offsetting. If the issue is an airline's compliance obligation, CORSIA eligibility is central. If the issue is a company buying voluntary carbon credits, credit quality, retirement evidence and claims guidance are usually more important than headline price alone.

What investors should watch

For investors, climate policy can affect both risk and opportunity. Carbon pricing can change operating costs. Border rules can change trade exposure. Disclosure rules can make weak transition planning more visible. Clean technology policy can support demand for renewables, grid upgrades, batteries, efficiency, low-carbon fuels and industrial decarbonisation.

Policy risk should not be treated as a single yes-or-no question. A company can benefit from clean technology demand while still facing supply-chain, permitting or financing risk. A fossil-heavy company can face carbon costs in one market while receiving policy support in another. For the investment angle, read the guide to climate risk and investment portfolios alongside the carbon pricing and policy explainers.

Bottom line

Climate policy is the rulebook behind many carbon market decisions. Understanding the Paris Agreement, the UNFCCC (United Nations Framework Convention on Climate Change), CBAM, CORSIA and emissions trading helps readers see why carbon prices, credit quality, supplier requirements and transition risk can change quickly.