UK and Europe to tie carbon markets in first climate deal since Brexit

The agreement follows California's pledge to extend its carbon investing program.

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The European Commission and the UK’s Labour government, which has been looking for creative ways to reset economic ties with Europe five years after Brexit tore them apart, said this week they will combine their carbon trading markets to help simplify the business of raising money from corporate emissions.

In addition to the larger focus of weakening Brexit, the climate deal recommits Europe to carbon markets just after California said it will reauthorize its U.S. carbon trading market for another 15 years. The deal also provides welcome news for carbon trading enthusiasts after a tough month of negative headlines about the status of direct air capture projects.

UK Prime Minister Keir Starmer, who has made fighting climate a priority for Labour and just last week launched the Great British Energy Company to help invest in the country’s renewable energy sector, said the deal will allow companies who buy emission allowances from either market to have its deal recognized by both.