LONDON, (Reuters) – Countries need to increase their use of carbon markets in order to achieve the Paris climate goals to limit a rise of 1.5 degrees Celsius (2.7 Fahrenheit) according to the Global Financial Markets Association.

From Sunday, global leaders will meet in Glasgow, Scotland for the United Nations Climate Summit. There, negotiators will try to establish rules that will govern how carbon markets are used according to the Paris agreement.

Only 20% of the global greenhouse gas emission (GHGs) can be covered by a regulated pricing system. The existing schemes establish low prices that are often insufficient to make real changes, according to a Boston Consulting Group report.

Steve Ashley (Chief of GFMA) and Head of Nomura’s Wholesale Division stated, “Effective Carbon Pricing in the Economy is One of the Strongest Tools to Drive Changed Outcomes, Treating GHG Emissions as a Time-Limited Resource”

Emission trading systems (ETSs) set a limit on how much carbon dioxide (CO2) a particular sector can produce. For each ton of carbon dioxide (CO2) emitted, companies have the option to purchase “carbon permits”.

It costs less than $5 to produce a tonne CO2 from existing schemes. The report stated that the cost would need to rise to 50-150 dollars per tonne in order to achieve the Paris Goals.

Carbon prices in Europe’s ETS, the world’s most established scheme, trade around 60 euros ($69.83) a tonne, while China’s ETS, which launched earlier this year, prices carbon at around 43 yuan ($6.73).

According to a Reuters poll, climate economists believe that a global carbon price at least $100 per tonne is required by 2050 in order to achieve climate goals.

Global Financial Markets Association includes financial sector trade associations in Europe, Asia, the United States.

($1 = 0.8593 euros)

($1 = 0.1566 renminbi)