Carbon Trading Market Boosted by UN Approval & Record Prices

Investors are paying close attention. 

On December 13th published an article titled “ESG Focus: COP26 Unleashes Carbon Markets

“Credit Suisse and Morgan Stanley provided Article 6 summaries in their recent COP26 updates; noting voluntary carbon markets could direct US$1 Trillion a year of transition capital towards developing countries by 2050.”

The carbon emissions trading market is booming thanks to several factors. 

Let's look at just 2 catalysts making recent headlines.

First, at November's climate summit in Scotland, the UN approved a new international carbon emission trading system. 

The goal is to give companies an efficient way to buy the carbon reductions they need from whoever has credits to sell...wherever they are in the world.

That means a very big market with very big potential valuations.

A recent study estimates that Brazil alone could sell up to $100 billion in carbon credits over the next 10 years, mainly by protecting or expanding their forests.

NPR logo
"Carbon emissions trading is poised to go global, and billions of dollars — maybe even trillions — could be at stake." – NPR, Dec. 6, 2021 - Link

This wasn't the first international approval of carbon trading.

Back in 2015, the Paris Agreement also approved emissions trading in principle...but they didn't define the process at that time.

This year's climate summit built on that past agreement. The nations attending actually hammered out rules for governing carbon trading.

Those rules could enable different countries or regions to connect and trade across legally mandated carbon markets. 

So, in the EU, they have the world's biggest carbon emissions market (more on that in a moment).

And in California, they have their own version of carbon trading (polluting companies buy credits, the proceeds flow to companies producing low-carbon fuel alternatives). 

The new rules are there to guide trades made across such international markets. 

For example, the rules prevent emissions reductions being counted by both countries instead of just one.

In addition to the new rules, economists say to make carbon trading work you also need:

  • Countries setting tighter carbon limits,
  • which will boost demand for credits,
  • which will drive up carbon prices.

Well, we're already seeing boosted demand and prices...which brings us to the second catalyst making recent headlines.

Remember how the EU has the world's biggest carbon emissions market?

The chart below shows the tear it's been on this year as it sets record-high prices.


That's what it looks like when a market is up over 2.5X in a year. 

No wonder more investors every day are discovering that carbon credits are the hottest new emerging asset class.

First Carbon Corp. is making it simple and secure to track and trade carbon credits through our proprietary platform accessible to everyone, everywhere.

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