Carbon trading could slash the cost of cutting greenhouse gas emissions by 70 per cent, a report commissioned by the prime minister found on Monday. Money invested in emissions cuts through a carbon market produces a greater “bang per buck” than other methods, the Global Carbon Trading report found.

A dollar invested in a global emissions market can cut 40 to 50 per cent more carbon than one invested only in reductions within the UK, the report found. In part, this is because cutting emissions in developing countries is often cheaper than in rich nations.