Category: carbon credits

How Environmental Markets Advance Net Zero



Environmental Markets Part 1 of 3
ESG Data Part 2 of 3
Sustainability Indices Part 3 of 3

The following content is sponsored by ICE.

How Environmental Markets are Advancing Net Zero

How Environmental Markets Advance Net Zero

In 2021, roughly 20% of global carbon emissions were covered by carbon pricing mechanisms.

Meanwhile, the global price of carbon increased 91%, bolstered by government, corporate, and investor demand. This puts traditional fuel sources at a disadvantage, instead building the investment case for renewables.

This infographic from ICE, the first in a three part series on the ESG toolkit, explores how environmental markets work and their role in the fight against climate change.

What are Environmental Markets?

First, meeting a goal of net zero carbon emissions involves limiting the use of the world’s finite carbon budget to meet a 1.5°C pathway.

Achieving net zero requires us to:

  • Change how we utilize energy and transition to less carbon-intensive fuels
  • Put a value on the conservation of nature or “natural capital” and carbon sinks, which accumulate and store carbon

Environmental markets facilitate the pathway to net zero by valuing externalities, such as placing a cost on pollution and placing a price on carbon storage. This helps balance the carbon cycle to manage the carbon budget in the most cost-effective manner.

What Is the Carbon Budget?

To keep temperatures 1.5°C above pre-industrial levels, we have just 420 gigatonnes (Gt) of CO₂ remaining in the global carbon budget. At current rates, this remaining carbon budget is projected to be consumed by 2030 if no reductions are made.

Carbon Budget1.5°C1.7°C2.0°C
Remaining GtCO₂4207701270
Consumed GtCO₂ (Read more...)

The Surge in Climate Risk Reporting



The following content is sponsored by the Carbon Streaming Corporation

 

Climate Risk Reporting

The Briefing

  • The Task Force on Climate-related Financial Disclosures (TCFD) provides a global framework for organizations to disclose climate-related risks and opportunities.
  • Since 2018, the number of TCFD supporters has grown five-fold.
  • Over 1,000 financial institutions support the TCFD, representing $194 trillion in assets.

The Surge in Climate Risk Reporting

An average of $2.5 trillion—or 1.8% of global financial assets—would be at risk from climate change if global temperatures rise over 2.5℃ by 2100.

Given that climate change imposes a risk to the world’s assets, reporting on climate-related risks and opportunities is becoming front and center for organizations amid growing pressure from investors and governments.

The Task Force on Climate-related Financial Disclosures (TCFD), created by the Financial Stability Board (FSB) in 2015, provides a global framework for such disclosures. This graphic sponsored by Carbon Streaming Corporation charts the rapid growth in support for climate risk reporting under the TCFD framework.

The Support for Climate-related Disclosures

The number of organizations supporting TCFD has grown five-fold in just three years, at an average annual rate of 73%.

YearNumber of TCFD SupportersCombined Market Capitalization
2018513$8T
2019785$9T
20201,512$13T
20212,616$25T

As of 2021, over 2,600 organizations supported the TCFD framework, with a combined market capitalization of $25 trillion. These organizations span 89 different countries and jurisdictions, highlighting the global support for climate risk reporting.

Additionally, 1,069 or nearly 41% of (Read more...)

Irrecoverable Carbon: The Importance of Preventing Deforestation



The following content is sponsored by the Carbon Streaming Corporation

 

Irrecoverable Carbon

The Briefing

  • Researchers have identified natural places that the world cannot afford to lose due to their irreplaceable carbon reserves, known as “irrecoverable carbon”
  • Nearly 50% of global irrecoverable carbon is found in forests

Irrecoverable Carbon: Preventing Deforestation

The Earth is home to some natural ecosystems that function as carbon vaults, storing massive amounts of carbon. Researchers developed the concept of “irrecoverable carbon” to identify areas on the basis of three criteria relevant for conservation:

  1. Manageability: How they can be influenced by direct and local human actions
  2. Vulnerability: The magnitude of carbon lost upon disturbance
  3. Recoverability: The recoverability of carbon stocks following loss

Applying the three criteria across all ecosystems reveals that some places contain carbon that humans can manage, and if lost, could not be recovered by 2050, when the world needs to reach net-zero.

The above graphic sponsored by Carbon Streaming Corporation charts global irrecoverable carbon by land area, highlighting important ecosystems that function as carbon sinks.

Breaking Down the Earth’s Irrecoverable Carbon

According to researchers Noon, M.L., Goldstein, A. et al., natural ecosystems contain around 139.1 ± 443.6 gigatonnes (Gt) of irrecoverable carbon globally. (Because the amount of stored carbon cannot be negative, the researchers restrained the uncertainty to 0–582.7 Gt.)

Here’s a breakdown of global irrecoverable carbon by ecosystem type:

EcosystemTotal Irrecoverable Carbon (Gt)% of Global Total
Tropical and subtropical forest41.129.5%
Boreal and temperate peat23.416.9%
Tropical (Read more...)

Visualizing Carbon Storage in Earth’s Ecosystems



The following content is sponsored by the Carbon Streaming Corporation.

Visualizing Carbon Storage in Earth’s Ecosystems

Each year, the world’s forests absorb roughly 15.6 billion tonnes of carbon dioxide (CO2).

To put it in perspective, that’s around three times the annual CO2 emissions of the U.S. or about 40% of global CO2 emissions. For this reason, forests serve as a vital tool in regulating the global temperature and achieving net-zero emissions by 2050.

In this graphic sponsored by Carbon Streaming Corporation, we look at the Earth’s natural carbon sinks, and break down their carbon storage.

Carbon Storage by Ecosystem

Forests contain several carbon sinks, from living biomass such as roots and leaves to soil. In fact, soil contains nearly twice as much carbon than the atmosphere, plant, and animal life combined.

  • Soil: 2,500 gigatonnes (Gt)
  • Atmosphere: 800 Gt
  • Plant & animal life: 560 Gt

The soil type, vegetation, and climate all affect how carbon is stored. For example, colder and wetter climates promote the most effective carbon storage in soil.

Global Carbon Storage* (Tonnes of carbon per hectare)VegetationSoil
Wetlands43643
Boreal forests64344
Temperate grasslands7236
Tundra6127
Tropical forests120123
Tropical savannas29117
Temperate forests5796
Croplands280
Deserts and semideserts
242

*Average stored carbon in tonnes per hectare at a ground depth of one meter
Source: IPCC

Wetlands are substantial reservoirs of carbon. Despite occupying only 5-8% of the Earth’s land (Read more...)

Visualizing the 3 Scopes of Greenhouse Gas Emissions



The following content is sponsored by the Carbon Streaming Corporation.

 

Types of carbon emissions

The Briefing

  • There are three groups or ‘scopes’ of emissions as defined by the Greenhouse Gas (GHG) Protocol Corporate Standard
  • A company’s supply chain emissions (included in Scope 3) are on average 5.5 times more than its direct operations (Scope 1 and Scope 2)

Visualizing the 3 Scopes of Greenhouse Gas Emissions

Net-zero pledges are becoming a common commitment for nations and corporations striving to meet their climate goals.

However, reaching net-zero requires companies to shrink their carbon footprints, which comprise greenhouse gas (GHG) emissions from various stages in the value chain. As more companies work to decarbonize, it’s important for them to identify and account for these different sources of emissions.

This infographic sponsored by Carbon Streaming Corporation explains the three scopes of GHG emissions and how they make up a company’s carbon footprint.

The 3 Scopes of GHG Emissions

According to the Greenhouse Gas Protocol, there are three groups or ‘scopes’ that categorize the emissions a company creates. The GHG Protocol Corporate Accounting and Reporting Standard, referred to as the GHG Protocol Corporate Standard, provides the most widely accepted standards for reporting and accounting for emissions and is used by businesses, NGOs and governments.

Scope 1 Emissions

These are direct emissions from sources that are owned or controlled by the company. Consequently, they are often the easiest to identify and then reduce or eliminate. Scope 1 emissions include:

  • On-site manufacturing or industrial processes
  • Computers, data centers, (Read more...)

Visualizing the 3 Scopes of Greenhouse Gas Emissions



The following content is sponsored by the Carbon Streaming Corporation.

 

Types of carbon emissions

The Briefing

  • There are three groups or ‘scopes’ of emissions as defined by the Greenhouse Gas (GHG) Protocol Corporate Standard
  • A company’s supply chain emissions (included in Scope 3) are on average 5.5 times more than its direct operations (Scope 1 and Scope 2)

Visualizing the 3 Scopes of Greenhouse Gas Emissions

Net-zero pledges are becoming a common commitment for nations and corporations striving to meet their climate goals.

However, reaching net-zero requires companies to shrink their carbon footprints, which comprise greenhouse gas (GHG) emissions from various stages in the value chain. As more companies work to decarbonize, it’s important for them to identify and account for these different sources of emissions.

This infographic sponsored by Carbon Streaming Corporation explains the three scopes of GHG emissions and how they make up a company’s carbon footprint.

The 3 Scopes of GHG Emissions

According to the Greenhouse Gas Protocol, there are three groups or ‘scopes’ that categorize the emissions a company creates. The GHG Protocol Corporate Accounting and Reporting Standard, referred to as the GHG Protocol Corporate Standard, provides the most widely accepted standards for reporting and accounting for emissions and is used by businesses, NGOs and governments.

Scope 1 Emissions

These are direct emissions from sources that are owned or controlled by the company. Consequently, they are often the easiest to identify and then reduce or eliminate. Scope 1 emissions include:

  • On-site manufacturing or industrial processes
  • Computers, data centers, (Read more...)

Why the Demand Outlook for Carbon Credits Is Bright



The following content is sponsored by the Carbon Streaming Corporation.

 

Carbon Credits

The Briefing

  • Demand for carbon credits (also referred to as carbon offsets) is poised to skyrocket as corporations aim to meet climate goals.
  • By 2050, demand for carbon credits could rise up to 100-fold.

Why the Demand Outlook for Carbon Credits Is Bright

More than ever, carbon credits are playing a critical role in tackling climate change.

Based on demand projections for carbon credits, the voluntary carbon market could grow up to 100-fold by 2050. Voluntary carbon markets are where carbon credits can be purchased by those that voluntarily want to offset their emissions.

In this graphic sponsored by Carbon Streaming Corporation, we show two demand scenarios in voluntary carbon markets:

 NGFS scenarios (GtCO₂)NGFS “immediate action” 1.5°C pathway scenario (GtCO₂)*
20200.10.1
2030E1.52.0
2050E<7<13

*With carbon dioxide removal
Source: McKinsey, NGFS = Network for Greening the Financial System

First, one gigaton is equal to one billion metric tons of CO₂— or one trillion kilograms.

According to the forecast from McKinsey, annual global demand for carbon credits could reach up to 1.5 to 2 billion metric tons of carbon dioxide by 2030 and up to 7 to 13 billion metric tons by midcentury.

This has steep implications for the voluntary carbon market: McKinsey estimates that in 2020 just a fraction of these totals were retired by buyers, at roughly 95 million metric tons.

How Do Carbon Credits Work?

A carbon credit represents one metric ton of greenhouse gas (GHG) emissions.

As companies contend with time and technological gaps in reducing their emissions, they purchase carbon credits to help offset their emissions. These purchases are facilitated by brokers who connect corporate buyers with project developers.

Project developers create carbon offset projects, such as protecting mangroves or reforestation. These projects, in turn, generate carbon credits.

Some projects also advance multiple United Nation Sustainable Development Goals by providing additional economic, social, educational, or biodiversity benefits.

Here is the transaction volume and value of the voluntary carbon markets.

YearVolume (MtCO₂e)Value (USD)
2021239$748M
2020188$473M
2019104$320M

Source: Ecosystem Marketplace, through Aug 31, 2021

In 2021, the value of the voluntary markets is projected to reach $1 billion— a record high. Driving this demand are corporate net-zero commitments, among other factors.

For instance, 1,565 companies with $12.5 trillion in revenue have set net-zero targets. Not only that, the 128 signatories of the Net-Zero Asset Managers Initiative, that represent $43 trillion in managed assets, are committed to supporting the goal of net-zero GHG emissions by 2050 or sooner.

As bold action is being increasingly expected from shareholders, carbon credits will likely play a greater role in corporate climate strategy.

Where does this data come from?

Source: McKinsey, ‘A blueprint for scaling voluntary carbon markets to meet the challenge,” January 2021.

The post Why the Demand Outlook for Carbon Credits Is Bright appeared first on Visual Capitalist.

44.01 secures $5M to turn billions of tons of carbon dioxide to stone



Reducing global greenhouse gas emissions is an important goal, but another challenge awaits: lowering the levels of CO2 and other substances already in the atmosphere. One promising approach turns the gas into an ordinary mineral through entirely natural processes; 44.01 hopes to perform this process at scale using vast deposits of precursor materials and a $5M seed round to get the ball rolling.

The process of mineralizing CO2 is well known among geologists and climate scientists. A naturally occurring stone called peridotite reacts with the gas and water to produce calcite, another common and harmless mineral. In fact this has occurred at enormous scales throughout history, as witnessed by large streaks of calcite piercing peridotite deposits.

Peridotite is normally found miles below sea level, but on the easternmost tip of the Arabian peninsula, specifically the northern coast of Oman, tectonic action has raised hundreds of square miles of the stuff to the surface.

Talal Hasan was working in Oman’s sovereign investment arm when he read bout the country’s coast having the largest “dead zone” in the world, a major contributor to which was CO2 emissions being absorbed by the sea and gathering there. Hasan, born into a family of environmentalists, looked into it and found that, amazingly, the problem and the solution were literally right next to each other: the country’s mountains of peridotite, which theoretically could hold billions of tons of CO2.

Around that time, in fact, the New York Times ran a photo essay about Oman’s potential miracle (Read more...)

Mapped: The Greenest Countries in the World


This post is by Therese Wood from Visual Capitalist


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Mapped: The Greenest Countries in the World

From widening wealth disparity to the environmental ramifications of economic development—the growing focus on global sustainability is a clear sign of the times.

Research reveals that when a sustainable ethos is applied to policy and business, it typically bodes well for economies and people alike. By providing benchmarks for those decisions, indexes like Yale’s Environmental Performance Index (EPI) can be critical to measuring national sustainability efforts.

The above map interprets the EPI ranking of 180 economies across 32 environmental health indicators by narrowing in on the top 40 greenest countries.

Who’s the Greenest of them All?

Despite the decades-long trend of globalization, national environmental policies have proved to be widely divergent. The EPI report confirms that those policies—and their positive results—are highly correlated with national wealth.

This is evidenced in the global EPI distributions, seen below:

OVERALL RANKCOUNTRYSCOREREGIONAL RANK
1Denmark82.51
2Luxembourg82.32
3Switzerland81.53
4United Kingdom81.34
5France805
6Austria79.66
(Read more...)

The Carbon Footprint of Trucking: Driving Toward A Cleaner Future



The following content is sponsored by DynCert.

carbon footprint of trucking

The Carbon Footprint of Trucking: Towards a Cleaner Future

The pandemic may have temporarily curbed greenhouse gas (GHG) emissions, but even a global recession can’t negate the impact of transportation—especially the carbon footprint of trucking.

In 2020, lockdowns resulted in an 8% average global decrease in GHG emissions over the first half of the year, when compared to 2019.

As this infographic from dynaCERT shows, trucking remains a significant contributor of GHGs amid booming ecommerce and increased international trade. But innovative solutions can help.

GHGs and the Impact of Trucking

Between 2005 and 2012, global GHG emissions plateaued but have risen every year since.

This growth is not expected to slow in the coming years. Between 2019 and 2050, the amount of atmospheric CO2 is projected to nearly double, from 4.5 to 8.2 gigatons.

Carbon dioxide is not the only substance emitted by trucking that’s detrimental to the environment:

Greenhouse Gases (GHGs)Black Carbon (BC)

  • Include carbon dioxide (CO2), nitrous oxide (N2O), and methane (CH4)

  • Trap heat in Earth’s atmosphere resulting in a greenhouse effect, or “global warming”

  • Emitted during processes like combustion and livestock farming, and can remain suspended in the atmosphere for decades or even centuries


  • Fine particulate air pollution also known as "soot"

  • Emitted by combustion engines, BC is the second-largest contributor to climate change after CO2

  • BC can remain in the atmosphere for weeks before falling to Earth in rain or snow

Road vehicles have been major (Read more...)