Dec. 6, 2022. By Mathew Carr
Trove Research hosted a carbon credit / COP27 webinar and outlined the prospects for the Energy Transition Accelerator, a new carbon market proposed last month by the U.S. government and others.
The maximum emission reductions seen through 2030 from ETA was 2.8 billion tons cumulatively, with a maximum value of $108 billion. That signals an average price of $38.57 per metric ton of carbon dioxide equivalent in that 8-year period, more than double current futures prices.
The average price could be higher if that scenario assumes a lower volume of reductions than 2.8 billion tons — it is a “high demand tight supply” scenario, afterall.
Per year, that is an average emissions reduction of 350 million tons per year.
The world needs reductions of about 20 billion tons a year by 2030 to meet the target for keeping global temperature rises below 1.5C above pre-industrial levels. Spending on the climate transition needs to be about $5 trillion per year vs $1 trillion now.
Carbon markets can allow investors to make money saving the climate. So, this measure has no where near the scale required to make much of a dent in the climate crisis, but it’s a start.
Source: Trove webinar snip
The Africa Carbon Market Initiative could provide an additional average of 175 million tons a year (ACMI scenario, see report below for your convenience).