Data ReFined #25: Market Pricing Dynamics in the VCM, Core Carbon Principles, and Carbon Credit Insurance
The Newsletter about Climate Data, Regenerative Finance, and Climate Risk β
Thank you for opening the latest edition of dClimate's biweekly newsletter! In this special issue, we focus on the latest in carbon finance, featuring our article on carbon credit market pricing dynamics and a comprehensive report from BCG on the voluntary carbon market (VCM). Additionally, we cover Arbol's recent write-up about climate insurance and discuss China's satellite launch aimed at enhancing precipitation data accuracy.
Let's dive in! π
Industry News
Deciphering the Carbon Credit Marketplace
The carbon credit marketplace can be compared to traditional commodities and its various stakeholder types, including project developers, traders, and corporations. Our latest article outlines the factors influencing carbon credit prices and discusses the complexity of price discovery due to predominantly over-the-counter transactions.
Read the full article below for all the details!
Demand for Quality Emissions Credits Continues to Grow
BCG's latest report, in partnership with Shell, details the voluntary carbon market's rapid growth and changing dynamics. From $2 billion in 2021 to a projected $40 billion by 2030, the focus on more robust MRV methodologies, removal credits, and the influence of Article 6 underline a strategic shift.
Core Carbon Principles (CCPs) for the VCM
The Integrity Council for the Voluntary Carbon Market (ICVCM) has initiated the assessment of over 100 carbon credit methodologies against the high-integrity Core Carbon Principles (CCPs). The assessment aims to enhance the credibility and integrity of carbon credits in the market, with carbon-crediting programs that meet the CCP criteria being eligible to use the CCP label on new and existing credits.
Understanding the Evolution and Future of Climate Insurance
A recent article from Arbol explores the concept of climate insurance, from its early community-based arrangements to contemporary policies designed for weather-related risks. Arbol advocates for updated risk models, alternative risk capacities, and innovative solutions like parametric insurance to manage these emerging challenges better.
Carbon Credit Insurance - Market Research
A new report by Oxbow Partners and Kita predicts the carbon credit insurance market could reach $1 billion by 2030 and expand to $10-30 billion by 2050, highlighting four key benefits insurance brings to the carbon markets. You can find more details and a link to the free report via the link below!
Carbon Credit Insurance - CarbonPool's Seed Funding
CarbonPool, a carbon credit insurance firm, has raised $12 million in seed funding. The Zurich-based start-up provides in-kind insurance against risks like shortfalls, reversals, business interruptions, and natural disasters. The startup plans to acquire and retain high-quality carbon credits for future compensations, enhancing the reliability and integrity of carbon offset initiatives.
Precipitation Data
China's recently launched FY-3G satellite aims to provide detailed 3D data on rainfall and other precipitation types worldwide, enhancing weather forecasting and climate studies. The high-precision observation data will be made freely available.
Forests and Cloud Formation
A new research study casts fresh insights into forests' role in affecting the climate and water cycle, underscoring how current climate models do not fully account for forests' impact, especially in terms of their contribution to cloud formation.
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