Is the carbon market experiencing a Trump Bump? Strange as it might seem there is evidence that the answer is yes. The Trump Administration’s aggressive anti-climate stance and moves to rollback regulations and pull out of the Paris Climate accord have shone a bright spotlight on the issue. Many businesses have responded not as many observers would expect. Wal-Mart penned an op-ed stating why they will continue to abide by the reduction targets laid out in the Paris accord. Even the Chamber of Commerce advocates for staying in this truly global agreement. I view this as a sign that businesses are taking the long view and realize carbon reductions will only get pricier over time.
These regulatory moves also create a business opportunity. Companies are stepping offset purchases to demonstrate to customers their ongoing commitment to address the issue independent of federal policy swings. Some are going a step further and committing dollars to offset projects as an investment strategy. BP recently announced a $5 million investment in a forest offset project developer so it can focus on developing voluntary forest offset projects. The company estimates this investment could have a significant leverage effect by generating $100 million for forest project landowners.
These moves from the private sector illustrate that voluntary offset markets are showing some resiliency and are posed to expand going forward in spite of the current trajectory of US carbon policy.