The principle is simple: a carbon price establishes how much companies need to pay for their emissions. The higher the price, the greater the incentive to pollute less and invest in low-carbon technology.

Governments can force these payments through a carbon tax – a levy companies must pay when they pollute – or through an emissions-trading system (ETS).
“Each country will have to come up with its own path to reaching net zero, but the expectation is carbon pricing is going to be a very important part,” said Wendy Hughes, Carbon Markets and Innovation Manager at the World Bank.

Many scientists expect the biggest annual fall in carbon emissions in generations this year as measures to contain coronavirus have grounded planes, docked ships and kept commuters at home.

However, the WMO described the projected 2020 drop as a “tiny blip” and said the resulting impact on the carbon dioxide concentrations that contribute to global warming would be no bigger than normal annual fluctuations.

The landmark EU rules, due to be finalised this year, will force providers of financial products to disclose from the end of 2021 which investments meet climate criteria, and can therefore be marketed as “sustainable”.

Gaining such a label is likely to help companies tap the growing share of investor cash looking to profit from the region’s multi-trillion-euro shift to a net zero emissions economy by 2050.