The following content is sponsored by Carbon Streaming Corporation.
A Complete Visual Guide to Carbon Markets
Carbon markets enable the trading of carbon credits, also referred to as carbon offsets.
One carbon credit is equivalent to one metric ton of greenhouse gas (GHG) emissions. Going further, carbon markets help companies offset their emissions and work towards their climate goals. But how exactly do carbon markets work?
In this infographic from Carbon Streaming Corporation, we look at the fundamentals of carbon markets and why they show significant growth potential.
What Are Carbon Markets?
For many companies, such as Microsoft, Delta, Shell and Gucci, carbon markets play an important role in offsetting their impact on the environment and meeting climate targets.
Companies buy a carbon credit, which funds a GHG reduction project such as reforestation. This allows the company to reduce their GHG emissions over a given time frame. There are two main types of carbon markets, based on whether emission reductions are mandatory, or voluntary:
Mandatory systems regulated by government organizations to cap emissions for specific industries.
Voluntary Carbon Markets:
Voluntary systems where carbon credits can be purchased by those wanting to offset their emissions.
As demand to cut emissions intensifies, voluntary carbon market volume has grown five-fold in less than five years.
Drivers of Carbon Market Demand
What factors are behind this surge in volume?
- Paris Agreement: Companies seeking alignment with these goals.
- Technological Gaps: Companies are limited by technologies that are available at scale (Read more...)