Quick answer: Carbon pricing — through taxes or emissions-trading systems — puts a cost on greenhouse-gas emissions that affects natural gas economics and its competitiveness against other fuels. Where it applies, carbon cost becomes an additional exposure that companies increasingly factor into hedging.

What is carbon pricing?

Carbon pricing charges emitters for the carbon they release, via a tax or a cap-and-trade market. It changes the relative cost of fuels and links to the broader impact of ESG factors on natural gas hedging.

How does it affect gas economics?

Gas emits less carbon than coal but more than renewables, so carbon pricing can improve gas's position versus coal while pressuring it versus zero-carbon energy — shifting demand and prices over time.

How does it enter hedging?

Where carbon markets exist, firms may face carbon-cost exposure alongside gas prices and can hedge carbon allowances as a related risk. Mobius Risk Group's carbon and ESG analytics help firms measure and manage this exposure.

Frequently asked questions

What is carbon pricing?

A charge on greenhouse-gas emissions, applied through a carbon tax or an emissions-trading (cap-and-trade) system.

How does carbon pricing affect gas?

It adds a cost to emissions, improving gas's position versus coal but pressuring it versus zero-carbon energy.

Can carbon be hedged?

Yes. Where carbon markets exist, allowances can be hedged as a related exposure alongside gas prices.