• Who We Are
    • The Climate Trust
    • Climate Trust Capital
    • Achievements
    • Leadership And Board Of Directors
  • What We Do
    • Action
    • Impact
    • Case Studies
  • Financials
  • Media
    • Blog
    • News & Press
The Climate Trust | Climate Trust’s Offset Outlook

Climate Trust’s Offset Outlook

California Market, Climate Finance, Scorcher

The carbon offset market, like every market, has been volatile since March 2020.  Although there have been periods of uncertainty around carbon offsets in the past – suspension of the Clean Power Plan in 2016 and the (then) uncertainty of the extension of California’s compliance market in 2017 – this one is different.  The volatility is not a function of jurisprudence or politics, but of uncertainty around projected demand for offsets during what could be a long-term economic downturn.  But the news is not all bad.  As the compliance market has experienced depressed prices due to depressed demand from both regulatory and financial buyers, the voluntary market looks poised for an onslaught of demand from corporate buyers.

Voluntary markets are just that – voluntary.  The commitment to purchase offsets is a business decision.  It seems like every week there is another press release announcing carbon reductions or carbon neutrality goals: Unilever, Verizon, Southern Company, Amazon…These are heavy hitters with strong balance sheets and the budgetary chops to implement carbon reduction and offset programs. It’s all the more impressive that some of these announcements have come since the economic downturn.   Adding up all those commitments points to a huge potential for voluntary offset credit demand.  Will all of that demand be in the US? Certainly not.  Voluntary offset prices range from $.50 to $25.00 and many of the cheapest offsets are generated outside the US.  However, Climate Trust’s experience working with voluntary buyers shows that price is not necessarily the primary driver.  Decisions are often based on the location, type and quality of the offset project.  Prices matter, but not as much as one might assume.

We believe the WCI compliance market will be neutral in the medium term as the economy slowly recovers, and bullish long term.  The WCI market’s decreasing annual targets and the cost effectiveness of offsets drive our thinking.  Voluntary offset markets, particularly those that are land-based like grasslands and forestry, will see a dramatic increase in demand over the next ten years.

 

Resources

Unilever Press Release
Seattle Times’ article on carbon neutrality pledges

Tags
Adaptation
Aggregation
American Carbon Registry
Biochar
Blue Carbon
C-AGG
California Air Resources Board
California Carbon Info
Cap and Invest
carbon offset standards
Carbon Pricing
Carbon-Pulse
Clean Power Plan
Climate Action Reserve
Climate Bonds
Conservation Finance Network
Corporate Social Responsibility
CORSIA
Culture
Dairy Digester
Ecosystem Marketplace
Edible Portland
Energy Central
Environmental Defense Fund
Environmental Justice
EPAF
Farm Power Northwest
GreenBiz
IPCC
Job Announcement
Leadership
Low Carbon Fuel Standard
Milestone
Oregon Carbon Dioxide Standard
Oregon Clean Fuels Program
Oregon Energy Facility Siting Council
Oregon Global Warming Commission
Pacific Coast Action Plan on Climate and Energy
Paris
Portland General Electric
REDD
Renewable Fuel Standard
Renewable Identification Numbers
Request For Proposal
RGGI
Rice
Risk Management
Scientific American
Social Cost of Carbon
Supply Chain
Sustainable Business Oregon
Triple Pundit
USDA Natural Resources Conservation Service
Verified Carbon Standard
Western Climate Initiative
Recent Comments
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT
Proud Member Partners in Diversity
  • DONATE
  • CAREERS
  • CONTACT

©2020 The Climate Trust. Crafted by ILLUSIO