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Global Carbon Markets Show Promising Growth in Q3 2023, Signaling Progress towards Climate Goals

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“Carbon markets continue to evolve as global efforts intensify, with Q3 2023 witnessing groundbreaking innovations and policy shifts that promise to reshape the future of emission reduction and sustainable practices.”

This quarterly newsletter provides valuable insights into the world of voluntary carbon markets. According to the World Bank’s 2023 State and Trends of Carbon Pricing report, almost a quarter of global emissions are now covered by carbon credits, a significant increase from just 7% a decade ago. The voluntary market is driving the growth of carbon credit market activity.

However, regulatory mechanisms are becoming more common, with many countries implementing new carbon regulations and trading schemes. While the US government has been funding green supply chains, the European Union and other nations are adopting carbon trading schemes and carbon taxes.

The World Bank also noted a decrease in carbon offset prices and issuances compared to the previous year. This can be attributed to concerns and criticisms about carbon offsets, economic conditions, and supply bottlenecks. Standardizing contracts within the marketplace is increasing liquidity and putting downward pressure on carbon trading. Prices for credits in regulatory carbon markets, such as the EU emissions trading system, fell mid-year before rebounding. Prices for credits in New Zealand and Korea’s ETS remain low. Within the voluntary market, buyers are favoring newer vintages and renewable energy projects over nature-based credits. However, prices for credits are expected to rise again.

To learn more about these developments, you can click on the link provided to access the full PDF report.

The blog post concludes with a list of Gibson Dunn lawyers who contributed to the preparation of this newsletter. They are available to address any questions or concerns you may have regarding carbon markets. You can also contact the lawyers specializing in environmental, social, and governance (ESG), environmental litigation and mass tort, global financial regulatory, energy, or tax practice areas.

Please note that the information provided in this blog is for general informational purposes only and should not be relied upon as legal advice. The sharing of this material does not establish an attorney-client relationship, and individual circumstances may vary.

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