Investment Trends and Outcomes in the Global Carbon-Credit Market
Research Paper
September 14, 2023
Preview
This report originally appeared on trove-research.com. MSCI acquired Trove Research — now known as MSCI Carbon Markets — in November 2023.
Between 2012 and 2022, investment into carbon-credit projects totaled USD 36 billion, with half of this occurring in the last three years and more than USD 3 billion in future investment already committed. This new wave of investment will deliver more than a thousand new carbon-reduction projects, ranging from forest protection to carbon capture and storage, and will provide a growing stream of carbon credits that corporates can use in their decarbonization efforts. Over 80% of the USD 18 billion raised in the last two and a half years is targeted at nature-based projects such as afforestation/reforestation, improved forest management and reducing emissions from deforestation and forest degradation.
Our analysis found that since 2020, more than 1,500 new carbon-credit projects have been developed and registered with the five leading carbon registries, with a potential to save as much as 300 million tonnes of CO2 a year, or roughly the same as the U.K.'s annual emissions. As many as 1,500 more projects are under development, with a potential further carbon saving of around 500 million tonnes of CO2 a year. However, the current rate of investment in carbon-credit projects is only one-third of the level needed to deliver the volume of credits required by 2030 under the agreed upon 1.5 degrees C goal.
Capital raises and commitments for carbon projects by project type
Data as of Sept. 30, 2024. Source: MSCI Carbon Markets
Read the full paper
Read the full paper
Provide your information for instant access to our research papers.
Future Size of the Voluntary Carbon Market
We examine the Taskforce on Scaling Voluntary Carbon Markets' estimates for the future size of the voluntary carbon market, comparing them to our own, much smaller, forecast of a market size of USD 10-40 billion in 2030.
2023 VCM in Review: Carbon Markets at an Inflection Point
The voluntary carbon market witnessed both considerable progress and significant hurdles in 2023. Will it successfully address its shortcomings, emerging as a scalable and effective mechanism to achieve climate goals? Or will it become entangled in the gridlock of global scrutiny and regulatory uncertainties?
Why COP28 Underscores the Importance of Voluntary Carbon Markets
Recent climate talks fell short of agreement on the international trading of carbon reductions that are seen as key to funding the global energy transition. We explain what has hampered progress and why voluntary carbon markets are leading the way.
The content of this page is for informational purposes only and is intended for institutional professionals with the analytical resources and tools necessary to interpret any performance information. Nothing herein is intended to recommend any product, tool or service. For all references to laws, rules or regulations, please note that the information is provided “as is” and does not constitute legal advice or any binding interpretation. Any approach to comply with regulatory or policy initiatives should be discussed with your own legal counsel and/or the relevant competent authority, as needed.