In looking ahead at 2020, there is a lot to be positive about on efforts to reduce GHG emissions.

The start of the year is always a time for taking stock and then looking forward. When it comes to carbon policy and markets there are several positive emerging trends that The Climate Trust sees as continuing to grow. Three trends in particular are state carbon policies, voluntary airline commitments, and increasing investment fund commitments.

In 2019, Oregon showed great promise in becoming the second state after California to have an economy cap on carbon emissions. Oregon ultimately came up short, but the legislature has come back this year with an updated bill intent on addressing concerns over gas prices and the impacts on rural counties. Washington’s legislature is again honing in on a cap-and-trade bill, while New Mexico, Nevada, and Pennsylvania have signaled an interest in adopting cap-and-trade policies. The number of states with carbon caps will likely grow in the coming years.

2020 is the year airlines can voluntarily start complying with a United Nation’s managed system to reduce carbon emissions; participation is mandatory starting in 2027. The system, known as the Carbon Offsetting and Reduction Scheme for International Aviation, is initially designed to reduce emissions through offset purchases and establish a price signal to encourage airlines to transition to more fuel-efficient fleets and planes that can fly reliably using biofuels. Although it only covers international travel, increased awareness has prompted several European airlines to offset domestic emissions. In the US, JetBlue has made a similar commitment. Expect to see more US-based airlines step up to plate and commit to offset purchases in 2020.

Blackrock made big news a week ago with its announcement that it will integrate climate change risks into its investment decisions. This new strategy is significant not only because Blackrock has the most assets under management among investment firms, but also because it is a significant provider of index funds for investors. Index funds are a form of passive investing and are managed conservatively when it comes to questioning changes in business practices of the firms in the fund. While Blackrock has voted against more than 80% of corporate climate resolutions, expect this number to go down as they recognize the growing risks to shareholder value from companies that fail to act to address the economic risks posed by a changing climate. Blackrock joins an expanding list of funds and fund managers, including the NY State Common Retirement Fund, that are integrating climate change risk into investment decisions. This list will surely grow in 2020.