Voluntary carbon markets offer hope for climate challenge
“I think there are two carbon markets – a compliance market where governments set the target and prices fluctuate to meet those. That market is facing serious challenges right now. Credit prices are pennies, especially in the EU,” he said.
“The one where we operate is the voluntary market, and there prices have trended down but it is still doing significantly better than the compliance market. In part that is because companies that have made a commitment to go carbon neutral and offset their emissions are for the most part not backing away.
“Demand is pretty steady – prices are trending down because there are more interesting projects coming onto the market.”
Compliance schemes are aimed at energy intensive emitters, including power generators, oil refineries and producers of cement, glass and ceramics and paper.
Voluntary markets are used by businesses who wish to manage their carbon footprint. Investors include multinationals like Marks & Spencer and Sky. They buy ‘credits’ in projects ranging from renewable energy, reforestation and energy efficiency schemes. Currently 5% of FTSE 100 companies are rated as carbon neutral.