Published on July 04, 2022 – CONTENT FROM GLOBE CONTENT STUDIO

While renewable energy is critical to reducing the world’s carbon footprint, building enough capacity will take decades. That’s one reason why voluntary carbon credit markets are expected to play an increasingly key role to help offset the impact of greenhouse gas (GHG) emissions.

One credit offsets one tonne of carbon dioxide, or an equivalent amount of methane or other GHGs. A 2021 study by Trove Research concluded that voluntary credits will be an essential lever for corporations to offset emissions. The study forecasts that the cost per credit could exceed US$50 by 2040 due to rising demand, up from a range of US$5 to US$20 today.

The Taskforce on Scaling Voluntary Carbon Markets, sponsored by the Institute of International Finance, with knowledge support from McKinsey, estimates that demand for carbon credits could increase by a factor of 15 or more by 2030, and by a factor of up to 100 by 2050. Overall, the market for carbon credits could be worth upward of US$100-billion in 2030.

More than 700 of the world’s largest publicly traded corporations have committed to net-zero carbon emissions initiatives. Many leaders, such as Alphabet Inc., Disney Corp. and Unilever PLC, are already purchasing voluntary credits.

The average investor has generally lacked access to high-return, pure-play ESG opportunities. “The voluntary carbon markets are now providing that access,” says Phil Hardwick, chief operating officer with Toronto-headquartered Base Carbon Inc.

Read full article here: https://www.theglobeandmail.com/amp/business/adv/article-carbon-is-an-emerging-asset-class-how-can-investors-get-in-on-it/