These are our key takeaways of the 2024 NYC Climate week, focussing on the Carbon Market summit.
The market.
Carbon Markets are here to stay and grow. There are global efforts in improving the regulation, certification and alignment of standards of the voluntary carbon market. We felt that there is an expectation and general optimism for the next steps for growing carbon markets and that solid progress on Article 6 could be made at COP29 in Baku.
The early adopters.
Companies using the carbon market typically outperform non-users in disclosing and reducing their own emissions, setting targets and investing in low-carbon technologies. The mayor change in emission reduction is shifting towards the use of non-fossil electricity for Scope 1 and 2 reductions. This supports the case that most companies reduce emissions in combination with the investment in carbon sinks.
Integrity rating.
The overall integrity rating of nature-based carbon dioxide removal projects has risen by over 18% in the last 2 years.
The entrepreneurs.
Currently the carbon market is focused and tailored for large cooperates having to disclose and investing in low-carbon technologies. There is a lack of market engagement and focus on the medium-sized companies wanting to enter the market. Currently there is no aligned strategy among project suppliers, certification bodies or trading platforms on how to integrate this large market segment.
Scope 3.
The need to change existing recommendations about using carbon credits to compensate for Scope 3 emissions, has caused friction within the influential SBTi, which provides guidance to its over 5,000 corporate members. Should the SBTi change its recommendation in the coming months, then a surge of liquidity could enter voluntary carbon markets.