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Accessing the Environmental Markets 

 

After calculating emissions across Scopes (1,2,3), companies first look to reduce those emissions through targeted activities. However, most are unable to achieve 100% reduction and turn to environmental markets to purchase allowances/credits/offsets. 

For Environmental Markets

Voluntary Carbon Offsets

Emission Reduction Credits

Carbon Allowances

Renewable Fuels

Renewable Energy Certificates

A Wide and Diverse Market for Offsets

Purchasing offsets is not like purchasing stocks. Offsets are available in many forums with different investors, pricing, purchasing requirements, and transaction fees. Following is a small sample of these forums:

Voluntary Markets vs. Mandatory (Compliance) Markets

In voluntary markets, entities elect to purchase credits to offset emissions they are unable to directly eliminate

  • Credits are generated by projects that reduce atmospheric carbon beyond what is required by law
  • Credits play a crucial role in bridging the path to future reductions
  • Pricing can vary significantly by region/locality of offset projects

In compliance markets, entities are required to purchase allowances for emissions they produce

  • Allowances are issued/sold by governmental regulatory authorities
  • The supply of allowances drop each year, typically increasing the price as demand for allowances increases
  • Pricing is notoriously opaque given infrequent purchases

Environmental markets are complex to navigate. Let our team help.

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