The GLOBAL CARBON MARKET

It has become common practice for global corporations to develop carbon emissions targets and net-zero strateies in an effort to limit emissions and restrict global warming to 1.50 C.  However, the most recent Conference of Parties (CoP) in Dubai concluded that holding global warming to 1.50 C may be unrealistic given the current global economic and political instability. There are two facets to consider when addressing carbon emissions. Firstly, there is the carbon emissions alone and secondly, there is the global sequestration rate of these carbon emissions. Historically, the Science Based Target Initiative (SBTi), the body charged with verifying corporate carbon emissions targets, has focused on the former and ignored the latter.

SBTi is the largest and most globally accepted and respected verifier of corporate climate strategies and net-zero goals. It has also been the primary obstacle to the growth of the carbon credit, or offset market, critical to managing carbon emissions and climate issues. SBTi is headquartered in London, England.

SBTi has been the strongest supporter of emissions accountability and its meticulous rules governing corporate net-zero plans. Yet, current SBTi policies restrict the corporate purchase of carbon offsets to balance their carbon emissions. The use of these carbon credits could in effect, ‘zero out’ their carbon emisions through sequestration protocols and in effect, achieve their corporate net-zero plans. Carbon offsets are an inportant tool necessary to promote the movement of investment capital into renewable and sustainable projects, like forests and dairy.

However, in early April, 2024, SBTi policies were modified to reflect a more comprehensive approach to meet corporate net-zero goals. Thes new policies would allow and support the use of carbon credits and expand the use of these credits globally as a market based solution to meet net-zero plans. Also, these revised policies would allow the use of carbon offsets- credits to expand their role and balance the carbon emissions of corporate supply chains as well.

These amended changes in the use of carbon offset policies by the world’s leading verifier of corporate net-zero startegies could well increase the annual demand for these carbon offsets to $1.1 trillion USD by 2050, if not sooner.