Carbon Pricing Surge Sparks Climate Finance Boom with $100B Raise

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About 23% of global greenhouse gas emissions are now subject to carbon pricing mechanisms, which collectively raised $100 billion in 2022 alone, according to a recent report by the Carbon Market Institute (CMI).

The report is a part of CMI’s International Carbon Market Update for 2024. It provides insights into global carbon pricing and policy as well as investment trends in decarbonization efforts.

CMI is a member-based institute with over 150 members. They include various stakeholders such as primary producers, carbon project developers, Indigenous organizations, legal and technology firms, insurers, banks, investors, corporate entities, and emission-intensive industries.

Driving Decarbonization: Carbon Markets Surge

In the global battle against climate change, financing the transition to a low-carbon economy is paramount. Carbon markets emerge as a pivotal mechanism in this endeavor, offering a pathway to channel investments towards emission reduction projects.

At the core of these markets is the principle of carbon pricing to incentivize entities to mitigate their carbon footprint. 

Janet Hallows, Director of Climate Programmes and Nature-Based Solutions at CMI, emphasizes the pivotal role of a robust global carbon market in channeling finance toward decarbonization initiatives. She said that:

“The new report shows that carbon markets are already driving large amounts of finance to decarbonisation efforts that would otherwise be underfunded, with strong demand for credits resulting in record retirements since 4Q2023.”

The same trend was observed by the MSCI Carbon Markets, reporting that retirements rallied in Q4 2023. The MSCI report noted that it’s the second highest quarter on record, despite slow corporate activities. This pattern was carried over into 2024.

Source: MSCI Carbon Market report

READ MORE: January 2024 Reveals Voluntary Carbon Credit Market Surprises

Despite current government pledges, the report warns that projected temperature increases still fall between 2.1°C and 2.8°C. 

Hallows underscores the potential of carbon markets to help bridge the gap toward a 1.5°C trajectory. But she further emphasizes the need for strengthened integrity measures and enhanced international cooperation.

These sentiments echo recent statements by UN climate change executive secretary Simon Stiell, who highlighted the importance of ambitious actions by key countries to limit temperature rise to 1.5°C. Stiell called for countries responsible for 80% of global GHG emissions to significantly revise their emissions targets by 2025.

According to the report, there’s a total of 73 national and subnational carbon pricing mechanisms in place, raising $100 billion in 2022. For the same year, the voluntary carbon market is valued at $1.87 billion.

Establishing Fair Carbon Pricing at COP29

Furthermore, Stiell advocated for the establishment of a fair global carbon price, traded with integrity, to stimulate investment in renewable energy and foster innovation. 

These initiatives are seen as critical steps toward achieving climate goals and will be central topics at the upcoming UN COP29 climate negotiations in November in Azerbaijan.

Hallows emphasizes the urgency of finalizing international carbon market rules at COP29. It’s the key to unlock the full potential of high-integrity carbon credits in accelerating global decarbonization efforts. 

These rules, outlined in the Paris Agreement, particularly regarding a centralized global market system, are crucial for countries to strengthen their climate commitments effectively.

The report also highlighted several significant developments in the carbon market space by region and country.

Global Momentum: Regional Developments and Agreements

Canada has introduced draft rules for a cap-and-trade scheme in the oil and gas industry. In South America, Brazil’s Lower House has endorsed a bill similar to that of Canada. 

Meanwhile, Turkey plans to launch its emissions trading scheme next year, and China will reintroduce its voluntary carbon crediting scheme.

Additionally, the report identifies 78 bilateral agreements signed by various countries, paving the way for trading emissions reduction units under Article 6.2 of the Paris Agreement. These units are otherwise known as internationally transferred mitigation outcomes, or ITMOs.

In Europe, the bloc is finalizing arrangements for a voluntary certification scheme for carbon removals, expectedly by next month. Over in the UK, the British government plans to introduce a Cross-Border Adjustment Mechanism similar to EU’s CBAM by 2027.

READ MORE: UK Reveals Move for a Carbon Border Tax in 2027

On a regional level, Singapore’s carbon tax scheme now permits liable companies to offset up to 5% of their taxable emissions using international carbon credits. 

Australia’s Clean Energy Regulator is collaborating with the Australian Stock Exchange to establish a national carbon exchange. They’re creating a new register for Australian Carbon Credit Units. 

The CMI report underscores the pivotal role of carbon pricing mechanisms in financing the transition to a low-carbon economy. With $100 billion raised in 2022 alone, carbon markets are driving significant investments towards decarbonization efforts globally.

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How To Reduce Scope 3 Emissions: Key Strategies That Work

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In the realm of environmental sustainability and corporate responsibility, the concept of Scope 3 emissions has gained significant attention. Understanding Scope 3 emissions and knowing how to reduce them is crucial for businesses wanting to address their environmental impact. 

This comprehensive guide delves into the definition, categories, and methods of identifying Scope 3 emissions and the various means to curb them.

Scope 3 Emissions: What You Need To Know

According to the Greenhouse Gas Protocol, Scope 3 emissions include all indirect emissions that occur in your company’s value chain. 

Unlike the other two emissions, Scope 1 (direct emissions from owned or controlled sources) and Scope 2 (indirect emissions from purchased electricity, heat, or steam), Scope 3 emissions capture a broader range of impacts. These emissions are often more challenging to measure and control because of their much diverse and dispersed nature.

Source: GHG Protocol

Scope 3 emissions come under three different categories:

Upstream Emissions: These emissions occur in the supply chain, covering activities such as raw material extraction, production, and transportation of goods and services.
Downstream Emissions: This category involves emissions related to the use, disposal, and end-of-life treatment of a company’s products.
Value Chain Emissions: Encompassing the entire lifecycle of a product or service, value chain emissions include both upstream and downstream impacts.

Identifying Indirect Emissions Sources

Identifying and quantifying Scope 3 emissions is a complex task, but essential for understanding of your company’s carbon footprint. Here are the key steps in identifying indirect emissions sources:

Stakeholder Engagement:

Collaborate with suppliers, customers, and other stakeholders to gather data on emissions throughout the value chain.
Understand the environmental impact of supplier activities, transportation, and end-use of products.

Life Cycle Assessment (LCA):

Conduct a life cycle assessment to analyze the environmental impact of products/services from raw material extraction to end-of-life disposal.
Consider various environmental indicators, such as carbon footprint, water usage, and land use.

Emission Factors and Benchmarks:

Utilize emission factors and industry benchmarks to estimate emissions from specific activities within the value chain.
Compare performance against industry averages to identify areas for improvement.

Technology and Data Solutions:

Leverage advancements in technology, such as data analytics and digital tools, to enhance the accuracy of emission measurements.
Implement robust data management systems to track and report emissions data effectively.

Importance of Addressing Scope 3 Emissions

READ MORE: What are Scope 3 Emissions and Why Disclosure is Important?

Keep in mind that embracing Scope 3 emissions as a part of your sustainability strategy is not only a corporate responsibility; it’s also a proactive approach towards building a resilient and environmentally conscious business.

These indirect emissions, spanning the entire value chain, contribute substantially to the overall carbon footprint of a company. Most businesses have Scope 3 emissions that are responsible for more than 70% of their total footprint. 

Per Wood Mackenzie, value chain emissions account for 80% to 95% of total carbon footprint from oil and gas firms. 

Essentially, by tackling Scope 3 emissions, oil and gas firms and other businesses can make meaningful strides toward reducing their ecological footprint and combating climate change. Doing so also enables companies to promote sustainable resource use, from raw material extraction to end-of-life disposal. 

Not to mention that many Scope 3 activities do impact biodiversity. Addressing these emissions helps project natural habitats and the diverse species that inhabit them.

Knowing how to reduce your own company’s Scope 3 emissions matters a lot in the view of corporate responsibility and stakeholder expectations. This has never been more important in an era where environmental consciousness is at the forefront. 

Additionally, governments and regulatory bodies are placing greater emphasis on how corporations must be responsible for their environmental footprint. 

Apart from governments, stakeholders – customers, investors, and employees – are also more concerned with the environmental practices of the companies they engage with. Taking steps to manage Scope 3 emissions fosters trust and enhances the company’s reputation as an environmentally responsible entity.  

Most notably, investors are increasingly considering environmental, social, and governance (ESG) factors in their investment decisions. The “E” factor seems to weigh the heaviest at this critical moment when investors made their final choice.

READ MORE: The Importance of Scope 3 Emissions in The Race to Net Zero

So, how do you assess Scope 3 emissions?

Strategies for Assessing Scope 3 Emissions

Assessing Scope 3 emissions involves a combination of advanced methodologies, data-driven approaches, and strategic baseline establishment. Establishing baselines, on the other hand, forms the basis for setting realistic emission reduction targets and ensures your company’s commitment to sustainable practices. 

Here are some strategies that collectively contribute to effective Scope 3 emission categories management you may consider. 

Life Cycle Assessment (LCA): this strategy allows you to quantify the environmental impacts at each stage of your product or service’s life. LCA provides a holistic view, considering raw material extraction, production, transportation, product use, and end-of-life disposal.

For example, the figure below is an overview of LCA for automobiles. Conventionally, the focus was only on CO2 emissions during driving. 

Graphic from Horiba.com

Nowadays, however, as required by LCA, it is the manufacturer’s responsibility to reduce environmental impacts at all phases of the product life cycle, from fuel mining and materials procurement to manufacturing, use, disposal, and recycling.

Emission Factors (EF) and Conversion Coefficients: This method is especially useful when detailed data is not available. You can use standardized emission factors and conversion coefficients relevant to your specific industry to estimate emissions from various sources. This is most particularly applicable when determining power or electricity emissions as explained in this article.  

Data Analytics and Technology: You can leverage advanced data analytics and technology solutions to process large datasets and enhance the accuracy of emissions measurements. By using real-time data monitoring and analysis, you will have more informed decision-making and proactive emission management.

Now when it comes to establishing baselines, you have to keep in mind several key steps. Firstly, data collection and inventory entail gathering comprehensive data on all activities within your value chain, including Scope 3 emissions. This detailed inventory forms the foundation for your accurate baselines. 

Moreover, stakeholder engagement is essential. It requires you to collaborate with suppliers, customers, and other stakeholders to gather relevant emission information. This involvement ensures you’ll have a comprehensive understanding of the supply chain, enhancing baseline accuracy. 

Additionally, benchmarking against industry standards allows you to make a comparison, identifying areas for improvement and setting realistic reduction targets. Setting these targets based on established baselines involves defining ambitious yet achievable goals for different stages of the value chain. 

Remember that clear targets will guide your strategies, providing a clear pathway for reducing emissions over time. 

Finally, implementing regular monitoring and reporting of emissions data against established baselines is crucial. It will help you ensure accountability and facilitate continuous progress toward your organization’s emission reduction goals.

Steps in establishing baselines to reduce Scope 3 emissions

This time, let’s dig deeper into each of the strategies so you get the clearest picture on how to reduce Scope 3 emissions. 

Collaborative Initiatives with Supply Chain Partners

Collaborating with supply chain partners involves engaging both with your suppliers and customers in concerted efforts towards sustainability. This begins with transparent communication and fostering open dialogue with suppliers regarding shared sustainability goals. 

A crucial part of this strategy is involving the establishment of initiatives to actively include suppliers in sustainability efforts. A good example of this is the Vietnamese EV company, VinFast’s strategy of establishing its EV battery line and supply chain. The automaker collaborates with battery industry leaders like China’s CATL to develop new battery and EV technologies. 

You may also have to integrate sustainability criteria into your procurement processes to ensure that environmental considerations have a key role in supplier selection. This also means establishing emission reduction targets together with your supply chain partners. 

That may involve a lot of work as you need to align your goals with theirs for your sustainability strategies to work. But that ensures a more inclusive participation and greater overall success in reducing emissions across the supply chain. 

Lastly, don’t forget your customers. Educate them about your company’s sustainability practices and involve them in initiatives to reduce product-related environmental impact. What heavy-equipment manufacturer Komatsu did is a perfect example. It collaborated with its customers in planning, developing, testing, and deploying zero-emissions mining equipment.

Sustainable Procurement Practices

As mentioned earlier, it’s also important to incorporate sustainable procurement practices in reducing environmental footprints in your supply chain. This means selecting suppliers with low emission practices which can substantially contribute to emission reduction efforts. Collaborative goal-setting with suppliers can further strengthen this approach. 

For chemical companies, reducing Scope 3 emissions heavily lies in sourcing low-carbon feedstock or increasing the share of recycled or bio-based raw materials. This is possible by partnering with low-carbon or recycled- or bio-based-feedstock suppliers.

For example, specialty-chemical company Unilever partnered with Evonik to scale bio-based raw material for use in dishwasher detergent. The initiative can help lower the carbon intensity of inputs. 

But one necessary thing is to assess the environmental impacts in your procurement decisions. Considering the full life cycle of products or services and using tools like LCAs can help you quantify environmental footprints. 

By choosing suppliers and products with lower environmental impacts, you minimize your overall environmental footprint, benefiting both the environment and your company’s reputation.

Travel and Transportation Emission Reduction Strategies

Employee travel is a major source of Scope 3 emissions. Encouraging sustainable commuting options like public transportation, carpooling, cycling, or walking reduces emissions from employee travel. 

You can do that by providing incentives such as public transportation subsidies or flexible work arrangements to motivate employees. Promoting remote work options also reduces commuting emissions.

Image from Pixabay

Prioritizing virtual meetings and video conferencing reduces the need for travel. When travel is necessary, opting for lower-emission modes like trains or electric vehicles helps. 

More importantly, clear guidelines and policies for business travel ensure consistent emission reduction efforts across the organization.

In the SaaS industry, the transition to remote work has profoundly influenced the emissions landscape. Global Workplace Analytics (GWA) reports that if individuals who have the ability to work remotely did so just half of the time, it would lead to a GHG reduction equivalent to removing the entire New York State workforce from commuting permanently.

The leading SaaS provider, Microsoft, is well-known for reducing its Scope 3 emissions, which include data center operations, corporate travel, and employee commuting. The tech giant pledges to achieve carbon negative by 2030 and net zero by 2050. And one crucial strategy to reaching that goal is promoting work-from-home setup to cut commuting emissions. 

Implementing Energy Efficiency Measures

Another essential strategy you can employ to reduce your organization’s Scope 3 emissions is adopting energy efficiency measures. Transitioning to renewable energy sources like solar, wind, hydroelectric, or geothermal power enhances energy efficiency and reduces environmental impact. 

By investing in renewable energy, you decrease reliance on fossil fuels and contribute to the global shift toward clean energy. Amazon is known for its massive efforts in supporting renewable energy initiatives, investing millions of dollars into them.

READ MORE: Amazon’s Carbon Emissions Take a Green Turn with Renewables

Furthermore, it helps significantly if you prioritize investing in energy-efficient technologies that minimize energy consumption and optimize resource use. For instance, upgrading to energy-efficient equipment, such as LED lighting and smart building systems, and instituting energy management systems and audits. 

Promoting energy-saving behaviors among employees further enhances efficiency. Embracing these measures reduces operational costs, cuts carbon emissions, and strengthens sustainability efforts. 

Employee Engagement and Behavioral Changes

Educating your employees about sustainability issues and their role in mitigating them is crucial. You can conduct workshops, seminars, or informational sessions to raise awareness about environmental challenges and the importance of individual actions. 

Providing resources like informational materials or online courses on sustainability topics further empowers employees to make informed decisions.

Doing so can help you encourage sustainable practices in the workplace and foster a culture of sustainability. Common examples of these practices are recycling, reducing waste, and conserving energy. 

Recognizing and rewarding your employees for their emission reduction efforts reinforces positive behaviors and encourages continuous improvement. You can integrate all these into daily operations and decision-making processes, turning sustainability into a strong organizational culture. 

Reporting and Monitoring Progress

Finally, it’s important to set clear Key Performance Indicators (KPIs) for measuring and tracking your company’s sustainability progress. These KPIs should be specific, measurable, achievable, relevant, and time-bound (SMART). Examples include carbon emissions reduction targets, energy efficiency improvements, waste reduction goals, and adoption of renewable energy sources.

By establishing KPIs, you can assess your performance against predetermined baselines and identify areas for improvement. Tech giant Meta is excellent at using KPIs in tracking its sustainability efforts and addressing pertinent issues.

But you also need to maintain regular reporting and transparency practices for accountability and stakeholder engagement. You should provide transparent disclosures on your initiatives, progress, and KPIs through annual reports, websites, or other communication channels. 

Additionally, soliciting feedback from stakeholders and incorporating it into your future emission reduction strategies fosters a culture of transparency.

Building a Sustainable Future through Effective Scope 3 Emissions Reduction

So, that’s how you tackle Scope 3 emissions. The measures identified seem to be too much to bear but it’s imperative to build a sustainable future. 

By implementing collaborative initiatives with your supply chain partners, you can significantly reduce your company’s indirect environmental impact. Plus, sustainable procurement practices, travel and transportation emission reduction strategies, and employee engagement further contribute to your emission reduction efforts. 

And remember to report and monitor your progress, including establishing key performance indicators and maintaining transparency, and track sustainability performance. 

By collectively embracing these measures, you won’t only mitigate your business’ environmental footprint but also pave the way for a more sustainable future for the planet. 

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The First-Ever Green Superbowl: Powered by 100% Renewable, Carbon-free Energy (CFE)

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For the first time in Super Bowl history, the massive power needed to host the Big Game over the four-hour contest came from a Nevada solar farm. The enormous Arrow Canyon Solar Project, owned by local utility NV Energy, powered the full game’s estimated 28 megawatt hours during this year’s Super Bowl.

In July of 2023, Allegiant Stadium was awarded LEED Gold Certification by the U.S. Green Building Council. NZero, the first a climate accountability company deploying real-time emissions data collection, independently quantified and verified Allegiant Stadium’s emissions across various scopes for their sustainability initiatives and helped build the roadmap for its net zero goals.

RELATED: Xpansiv Acquires SRECTrade – Solar Renewable Energy

Allegiant Stadium and the Las Vegas Raiders built in highly innovative design features, such as solar panels and energy-efficient lighting, further reducing the stadium’s environmental impact. And renewable energy is not the only sustainability measures the group have taken implementing other initiatives as well including:

Food Scrap Collection
Grass Clippings Collection
Rubber Pellet Recycling
Waste Diversion

Understanding the Environmental Impact of Super Bowl LVIII

The Super Bowl is more than just a game; it’s a massive event with far-reaching economic and environmental effects. Beyond the excitement of football, it’s crucial to examine its environmental footprint, including carbon emissions and energy consumption and environmental impact of Super Bowl LVIII in detail.

Benjamin Leffel, an assistant professor of public policy sustainability at the University of Nevada, Las Vegas, highlighted the environmental impact of the Super Bowl. He said that:

“The emissions levels of a mega-event like this from air traffic, and the energy use is at least double in a day than it would be on average.”

The world sport sector is estimated to be responsible for about 50-60 billion tonnes of CO2e per year according to Rapid Transition Alliance, a network of international organizations tackling the climate emergency. Sporting events are responsible for massive levels of emissions like carbon-heavy power-hungry stadiums, unrecyclable garbage, and all the energy required for television and web broadcasts.

Sunday’s game, the celebrations and after-parties will leave a considerable carbon footprint using around 20,000 megawatt-hours of electricity, roughly equal to the power it would take to electrify 46,052 households across the US. Digital advertising during the Super Bowl will further exacerbate environmental concerns, generating substantial carbon emissions. The widespread use of electronic devices during the event also contributed to massive energy consumption.

The NFL’s environmental program, NFL Green, aims to reduce the environmental impact of major events like the Super Bowl. This includes partnerships with sponsors, local committees, and initiatives like e-waste recycling and food donation. However, further efforts to reduce energy consumption and support clean energy initiatives are needed with broader goals for a sustainable future.

Many critics and pundits will see all this as greenwashing. Just think about the thousands of fans, players, and staff that drove or flew in for the game – ahem Taylor Swift – so the Super Bowl still has a considerable carbon footprint.

Yet with the first-ever Green Superbowl in the Solar Stadium won, done and over, its certainly a step in the right direction for the world of sport.

RELATED: SEC Starts to Focus on Climate Change Impact

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Tesla Hits Record High Sales from Carbon Credits at $1.79B

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Elon Musk’s Tesla generated a substantial $1.79 billion from carbon credit sales last year, as revealed in their Q4 2023 and annual financial report, bringing its total earnings from such credits since 2009 to nearly $9 billion.

This revenue comes from trading regulatory credits to other automakers unable to meet emission regulations in the US, Europe, and China.

Carbon Credit Cashflow: Tesla’s Billion-Dollar Bonanza

Tesla continues to profit from the need of its rivals to meet emissions standards. It is a lucrative business that was initially expected to diminish. Since the EV giant incurs minimal additional costs to earn these credits, the sales represent almost pure profit.

This revenue stream has been crucial for Tesla, although the specific recipients of the credits remain undisclosed. 

In its recent fourth quarter and annual 2023 filings, the EV maker reported a $433 million income from the sale of carbon credits. That figure represents a 7% decrease year over year (YoY) compared to $467 million earned in Q4 2023. 

But the total annual revenue of Tesla from selling carbon credits in 2023 increased to $1.79 billion from $1.78 billion. Yet, that enabled the automaker to reach another record high in 2023. 

This sustained revenue may have surprised Tesla, given previous expectations that regulatory credit income would fall as competitors increased EV production. 

In 2020, the company’s former CFO Zachary Kirkhorn cautioned investors about relying too heavily on this revenue stream. He forecasted a decline in its significance over time.

However, contrary to expectations, Tesla’s earnings from regulatory carbon credits have not decreased significantly, as last year’s earnings slightly surpassed the previous year’s income.

RELATED: Tesla Carbon Credit Sales Reach Record $1.78 Billion in 2022

Tesla is Driving the Carbon Market Forward

By providing its peers a mechanism to offset their carbon emissions, Tesla plays a significant role in the carbon credit market.

As the automotive sector seeks to comply with emissions standards set by regulatory bodies, they can purchase carbon credits from Tesla. They can also do the same from other companies that reduce greenhouse gas emissions through renewable energy and other carbon reduction or removal initiatives.  

The revenue generated from the sale of carbon credits has become a substantial source of income for the company. In fact, the credits account for a staggering 11% of Tesla’s overall gross margin for the quarter, $4,065 million, down from 25.9% seen in Q4 2022.

Tesla’s total automotive revenues of $21,563 million were up 1% YoY but missed analysts’ estimate of $22,385 million. 

Still, the growing carbon credit sales underscores the value of the EV maker’s clean energy initiatives. This is also evidenced by another growing business of the company, energy generation and storage. Its Q4 2023 revenues totaled more than $1.4 million, up from the year-ago earning of $1.3 million.

Given the global focus on reducing carbon emissions and addressing climate change, the demand for carbon credits is expected to increase in the future.

Tesla’s position as a leader in the electric vehicle market and its commitment to sustainable energy place it in a favorable position to continue profiting from the sale of carbon credits in the years to come.

RELATED: Tesla’s Record Carbon Credit Sales Up 94% Year-Over-Year

Gearing Up Amid Shifting Automotive Landscape

Despite its continued dominance in the U.S. EV market, Tesla faces growing competition, particularly from China’s BYD. The Chinese automaker recently surpassed Tesla as the world’s largest seller of EVs. 

BYD’s vehicle production was up substantially last year, almost 2x as high as in 2022, at 3.02 million units. However, around 1.4 million of these vehicles were hybrids, while Tesla produced around 1.84 million all-electric vehicles.

Moreover, some of Tesla’s competitors are scaling back their EV investment plans, with Ford delaying $12 billion in investments. On the other hand, General Motors is reintroducing hybrids to its lineup.

As emissions regulations tighten, the regulatory landscape becomes increasingly challenging. 

Europe is imposing stricter car emissions targets starting next year, with even more stringent standards set for 2030 and beyond. The EU sets a 100% emission reduction goal for both cars and vans from 2035 onwards.

Similarly, the United Kingdom has implemented a zero-emission vehicle mandate beginning this year.

At home in the U.S., the government committed $623 million in grants to propel the growth of EVs. The financing was made available through the 2021 Bipartisan Infrastructure Law. The funding aims to make EV chargers more reliable and accessible for American drivers.

Tesla’s lucrative carbon credit sales continue to defy expectations, bolstering its financial performance and solidifying its role in sustainable transportation. And despite growing competition and tightening emissions regulations, Tesla’s position in the EV sector remains robust, fueled by its commitment to clean energy initiatives.

READ MORE: Transforming the American Clean Energy Landscape Under Biden’s Era

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Athian’s New Carbon Insetting Marketplace Revolutionizes Livestock Farming

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Athian has launched a groundbreaking voluntary livestock carbon insetting marketplace, featuring the first accepted protocol aimed at reducing enteric methane emissions and improving feed utilization using innovative feed management products from Elanco Animal Health. This unique carbon marketplace allows farmers to monetize their greenhouse gas emission reductions.

Athian offers economic incentives for sustainable farming through carbon credits generation. The Indianapolis-based company monetizes the reductions for the beef and dairy farmers by selling those credits. Its platform benefits the global food system sustainability while reducing planet-warming emissions. 

Elanco Animal Health is the world’s third largest animal health company. It specializes in innovating and delivering products and services to prevent and treat disease in farm animals and pets.  

Livestock Farming’s Green Revolution: Carbon Insetting

Data indicates that animal agriculture contributes to at least 16% of global GHG emissions, leading to deforestation and biodiversity loss. Within livestock emissions, methane, nitrous oxide (N2O), and carbon dioxide are prominent. Methane and N2O are significantly more potent than CO2 in terms of their warming effect.

Livestock supply chains generate GHGs through various means. These include methane production during the digestive process of animals, feed production, management of manure, and energy consumption. 

Athian’s platform is the world’s first carbon credit program for livestock. The initiative involves verifying farms, certifying and selling carbon credits within the dairy value chain. This enables dairy farmers of all sizes to implement sustainability interventions, measure their impact, and undergo 3rd-party verification for GHG emissions reductions. 

RELATED: Livestock Carbon Credit Marketplace Secures Seed Investment

The resulting carbon credits can then be sold in Athian’s livestock carbon insetting marketplace.

Companies in the dairy value chain, such as consumer-packaged goods companies and food retailers, can purchase these carbon credits to contribute to their Scope 3 emissions reduction goals. 

This not only provides economic value to farmers through credit sales but also supports the U.S. dairy industry’s progress towards GHG emission neutrality by 2050.

Early last month, the company announced the first sale of carbon credits to Dairy Farmers of America (DFA), the biggest milk marketing cooperative in the U.S. 

If the entire U.S. dairy industry adopted this intervention, it could potentially prevent 4.7 million metric tons of carbon emissions annually from enteric, feed, and manure emissions. This underscores the significant contribution that animal agriculture can make toward climate mitigation efforts.

Athian’s Carbon Marketplace Provides Sustainable Solutions

In the long term, the marketplace aims to expand to include other livestock and poultry sectors. Paul Myer, CEO of Athian, emphasizes the uniqueness of their marketplace, being distinct from traditional carbon offsetting platforms as it retains economic and environmental value within the animal protein value chain. He further added that: 

“Athian’s first carbon credits for dairy are an exciting and crucial step as they demonstrate the ability to tangibly quantify and verify greenhouse gas emissions reductions and create monetary value for farmers for their efforts.” 

While carbon markets are widely known among farmers, only 3% are currently participating, according to a recent USDA survey. Athian’s inset market model, developed in collaboration with recognized supply chain partners, aims to simplify measurement and verification processes, breaking down barriers to entry and expediting progress.

Jeff Simmons, President and CEO of Elanco Animal Health, expressed excitement about Athian’s milestones. He highlighted the potential for farmers to achieve climate-neutral farming and create new value.

Elanco’s focus on delivering enteric methane reduction solutions could significantly impact emissions across the U.S. dairy industry.

RELATED: Revolutionizing Dairy Sustainability: Reducing Methane Emissions by 80%

Elanco’s UpLook tool, designed to measure and monitor GHG emissions using on-farm data and peer-reviewed science, complements Athian’s verification system. This integration helps farmers quantify reduction efforts and certify carbon credits for sale, further incentivizing sustainability practices.

Transforming the Food Chain

Food companies and retailers have publicly committed to collectively reducing over 100 million metric tons of GHG emissions by 2030. Despite progress in corporate goal-setting, reducing Scope 3 emissions, primarily from raw material production like milk, remains a significant challenge. 

Athian’s introduction of the insetting livestock carbon credit marketplace offers companies in the animal protein value chain a tangible opportunity to advance their Scope 3 emission reduction objectives.

Enteric methane reduction carbon credits are currently available for purchase through Athian’s insetting carbon marketplace. 

Athian’s innovative livestock carbon insetting marketplace, in collaboration with Elanco Animal Health, marks a significant milestone in the agricultural sector’s journey towards sustainability. By monetizing greenhouse gas emissions reductions and incentivizing sustainable practices, the platform not only

READ MORE: Canada’s Plan to Curb Methane Emissions from Cattle Burps

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Jets, Glitz, and Carbon Hits: 1,000 Private Jets to Fly to Super Bowl

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The influx of about 1,000 private jets into Las Vegas for the upcoming Super Bowl between the San Francisco 49ers and the Kansas City Chiefs raises concerns from both economic and environmental standpoints. So, the Super Bowl LVIII may become a super planet-warming football game. 

Fueling the Economy, Heating the Planet

The surge in air traffic may boost the local economy due to increased spending in Sin City. However, it also significantly contributes to carbon emissions and energy consumption.

Benjamin Leffel, an assistant professor of public policy sustainability at the University of Nevada, Las Vegas, highlighted the environmental impact of the Super Bowl. He said that:

“The emissions levels of a mega-event like this from air traffic, and the energy use is at least double in a day than it would be on average.”

The presence of private jets at the big game is not something new. The event typically attracts high-profile individuals from various sectors. But this year’s attendance is expected to surpass the previous years’.

Last year, for instance, around 562 private planes flew into airports near Glendale, Arizona, where the Super Bowl was held. Also, 752 private jets arrived in Los Angeles for the 2022 event.

Private jets leaving Arizona after Super Bowl Source: Tom [email protected]

This year’s Super Bowl is projected to draw around 450,000 visitors, with a significant option opting for private air travel. This trend mirrors the influx of private jets seen during the Las Vegas Grand Prix in November, where 927 business jets landed in the city’s airports. 

Authorities from the Clark County Department of Aviation anticipate a similar level of air traffic for the upcoming Super Bowl. And Taylor Swift is one of those flyers to support her boyfriend Kansas City Chiefs player, Travis Kelce.

RELATED: Carbon Footprint Controversy For Taylor Swift Ahead of Super Bowl LVIII

How Bad Are Private Jets for the Atmosphere?

The environmental impact of private jets is significantly greater than that of commercial flights. They’re one of the most polluting modes of transport per passenger kilometer. 

Source: Beatriz Barros & Richard Wilk (2021). The outsized carbon footprints of the super-rich, Sustainability: Science, Practice and Policy. Graphics by BuzzFeed News.

According to the NGO Transport and Environment, private jets releases 5-14x more emissions per passenger than commercial flights. Compared to trains, that would be a staggering 50x more.

A recent report by Greenpeace revealed that private jets emitted a total of 5.3 million tonnes of CO2 over the last 3 years. The number of flights will increase from nearly 119,000 in 2020 to 573,000 in 2022. 

This level of CO2 emissions is equivalent to or even greater than the annual emissions of entire countries like Uganda.

According to the Federal Aviation Administration (FAA), 1 out of every 6 flights they handle are flown by private jets. Moreover, carbon pollution has jumped by over 23% as private jet flyers have increased by about a fifth since COVID-19. 

Putting that into context, in popular travel routes like between Washington DC and New York City, a private plane emits an estimated 7,913 pounds of CO2 per passenger on this route, whereas commercial planes emit only 174 pounds of emissions. In comparison, traveling by train emits just 7 pounds of CO2 per passenger, while bus travel emits 88 pounds. 

That figure means flying private is responsible for about 45x as many emissions as flying commercially on the same route. And that’s over 1,100x the emissions of traveling by train. 

The sharp increase in private jet emissions underscores the urgent need to address the environmental impact of luxury air travel. As efforts to combat climate change intensify, there is growing pressure to regulate and reduce emissions from luxurious private travels. 

The Environmental Toll of Private Jets at Super Bowl 

The increase in air traffic, particularly from private jets, for events like the Grand Prix and the upcoming Super Bowl in Las Vegas has sparked concern among some local residents. They have expressed unease about the noticeable impact of the additional planes on the city’s atmosphere.

Las Vegas has long been associated with extravagance and luxury, catering to high-rollers in various forms of entertainment. With the influx of private jets for events like the Super Bowl, the city now also attracts high-flyers, adding to its reputation as a destination for the elite. 

READ MORE: Beyond Touchdowns and Trophies: Unveiling the Carbon Footprint of Superbowl LVIII

As the Super Bowl LVIII approaches, the influx of private jets into Las Vegas raises both economic prospects and environmental concerns on emissions. While the event promises to fuel the local economy, the surge in air traffic adds significant carbon emissions, highlighting the need for sustainable alternatives in luxury travel.

The post Jets, Glitz, and Carbon Hits: 1,000 Private Jets to Fly to Super Bowl appeared first on Carbon Credits.

Carbon Credit Insurance Market to Hit $1B in 2030, $30B by 2050

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Insurance has a crucial role to play in supporting carbon markets as the world continues its journey to net zero. A report estimates that by 2030, insurance premiums could reach ~$1 billion and 2030 and $10-$30 billion by 2050.  

The report is a collaboration between Oxbow Partners and Kita, titled “Are carbon credits the next billion-dollar insurance market?”

Premiums with a Purpose: The Role of Carbon Credit Insurance

The study emphasizes the crucial role of insurance in supporting the carbon market amid global efforts to combat climate change. It also provides a comprehensive overview of the carbon market’s potential, offering valuable insights for industry experts. 

According to the report, insurance can provide 4 key benefits to the carbon credit market: 

A balance between traditional risk management practices and innovation – enabling improved access to finance to scale carbon projects. 
A stamp of confidence – risk management and regulatory expertise, honed over decades, can bring confidence to the market and its participants. 
Detailed assessment of carbon project risk – highlighting areas of concern across the market and project types, where wider risk management improvements are required. 
Encourage market participants to take risks – insurers take on responsibility when things go wrong, giving market actors the freedom to take risks which are necessary to release capital and scale carbon projects and their associated benefits. 

Below are the risks identified in the report, which the insurance market could mitigate.

Industry leaders, including prominent brokers and insurers such as Aon, Howden, Marsh, AXA XL, CFC, Chaucer, and Fidelis, are optimistic about the market’s prospects, viewing its expansion as inevitable. These industry giants think that the carbon credit insurance explosive growth isn’t a matter of “not if” but “when”.

Miqdaad Versi, Head of the Sustainability Practice at Oxbow Partners, expressed optimism about the market’s potential. He particularly highlighted its importance in facilitating green initiatives while generating profits. While James Kench, Head of Insurance at Kita, added that: 

“The insurance market is on the front line for climate risk and is uniquely placed to help business and society navigate through increasingly uncertain times. This report is a call to action for the insurance industry to embrace a vast new carbon risk pool with purpose.”

RELATED: Carbon Credit Purchases in Canada Are Now Protected With Kita

The Billion-Dollar Horizon

The report forecasts the total addressable market for carbon credit insurance to reach about $1 billion in annual Gross Written Premium (GWP) by 2030, with a projected increase to $10-30 billion GWP by 2050. 

However, this estimate may underestimate the market’s full-scale potential. The calculations focus solely on the voluntary carbon market (VCM), excluding the compliance market. 

In 2023, the global Compliance Carbon Markets were valued at over $800 billion. These markets are closely linked to policy shifts and geopolitical tensions, leading to fluctuations in their size and growth trajectory depending on external factors and the prevailing environment.

In 2022, the VCM was valued at $2 billion. However, Abatable, a carbon intelligence and procurement platform, estimated that in the same year, deals worth $10 billion were executed. This implies that investment into the market was about 5x the value of the carbon credits issued.

According to a Barclays Special Report, the VCM could grow to $250 billion by 2030. Various organizations have made predictions of VCM growth in 2030, with estimates ranging from $10 billion to $250 billion. The complexity, rapid evolution, and convergence of the markets make size predictions challenging. 

However, even the lowest forecasts anticipate the market to grow 5x. Long-term predictions are optimistic, with some expecting the market to exceed a trillion dollars by 2050.

Currently, the VCM predominantly covers credits sold by carbon dioxide removal (CDR) projects. 

READ MORE: Carbon Dioxide Removals (CDR) Purchases Jump 437% in First Half of 2023

McKinsey estimates that based on expected delivery of announced projects, the CDR market could reach $40-$80 billion by 2030. As the CDR industry scales up, which overlaps with the VCM, it’s likely to further stimulate market growth. 

So, if the VCM and compliance carbon markets converge as expected, it would lead to a substantial market expansion. 

Addressing Risks in the Carbon Market

The GWP opportunity covers a broad spectrum of insurance needs within the carbon market sector. This includes specialized insurance for carbon credits as well as traditional insurance lines necessary for carbon projects and businesses operating in this sector. For instance, construction, property, casualty, financial lines, and marine insurance, among others. 

While the report’s long-term prospects for the insurance industry are optimistic, their approach in estimating the potential market opportunity was conservative. 

The authors also discounted the potential impact of regulatory mandates requiring insurance and the merging of both markets. Their estimation was also based on the projected annual carbon credit market, rather than the additional investment required to produce these credits themselves. Factoring in the latter could potentially result in a multiple of 3-5x if applied on top.

Indeed, the rapidly evolving carbon markets present a complex landscape, characterized by unique risks and significant challenges. However, the presence of insurance within these markets is paramount for their exponential growth. 

The introduction of insurance mechanisms can effectively address risks, enhance confidence among investors, and consequently stimulate increased investment. This, in turn, will enable the markets to scale at the necessary rate to align with global emission reduction targets and effectively combat climate change.

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Beyond Touchdowns and Trophies: Unveiling the Carbon Footprint of Superbowl LVIII

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The substantial carbon footprint associated with the Super Bowl, one of the most-watched sporting events in the U.S., is not primarily linked to travel or the show’s energy use. Interestingly, it’s largely attributed to the significant environmental impact of the Super Bowl advertising frenzy. 

The ads, which last in online promotions before and after the event, raise concerns among environmentally conscious consumers and investors. Unsurprisingly, climate experts emphasize the need to address the massive environmental impact of America’s most-loved and most-viewed sporting event. 

Big-Time Sporting Events and Their Giant Environmental Impact

The sport of football or soccer is highly entertaining. But what most fans or spectators don’t know is that the global football industry is responsible for emitting over 30 million tons of carbon dioxide annually. That’s almost equal to Denmark’s annual emissions.

Millions of Americans regularly tune into football games, especially major events like the upcoming Super Bowl LVIII, with last year’s viewership exceeding 99 million. The immense audience underscores the need for organizations to assess the environmental impact of these sporting events. 

Major sports leagues, like the NFL and NBA, can have a big influence over viewers. They can play a crucial role in promoting sustainability.

Large-scale sporting events often involve unforeseen environmental consequences. The construction of new infrastructure, sanitation upgrades, increased energy demands, and waste management challenges contribute to the overall impact on the environment. 

Watch parties hosted by viewers further add up to waste generation and travel emissions on a national level. 

According to an estimate, major sports leagues, including the NFL, NBA, NHL, and MLB, generate about 35,000 tons of CO2 annually, which covers fans’ emissions only. Think about the waste by the teams playing during the events. 

More notably, A-listers and celebrity fans of the big game also contribute significantly to its CO2 footprint by flying through their private jets. Popstar Taylor Swift is one great example, who has been the subject of intense scrutiny for her sky-high flight emissions.  

READ MORE: Carbon Footprint Controversy For Taylor Swift Ahead of Super Bowl LVIII

Additionally, the energy consumption to power stadiums, resource-intensive field maintenance, and the sale of food, beverage, and merchandise at games contribute significantly to the environmental impact of beloved sporting events in the United States.

And that even doesn’t include the biggest source of the Super Bowl’s carbon footprint – buzzy digital advertisements.

Super Bowl Ads Carbon Footprint

When advertisers calculate the expense of Super Bowl advertising, the immediate focus is often on the $7 million fee for a 30-second slot. However, what might be significantly overlooked is the environmental cost of the ads. 

Super Bowl Average Ad Cost, 2002-2021 (in million USD)

In 2021, Super Bowl advertising produced as much carbon dioxide as 100,000 Americans or around 2 million tonnes of CO2. This calculation is based on data from iSpot.tv, indicating that 56 advertisers and their 67 spots resulted in over 6.3 billion TV ad impressions, 26 million online views, and 64 billion social impressions. 

Some sources further noted that in the lead-up to the Super Bowl, there were a total of about 4 billion digital ad impressions. To put that in perspective, 1 million ad impressions is equal to 1 metric ton of CO2 or its equivalent. Using that data, the 4 billion ad impressions generated 4,000 metric tons of CO2e. 

In 2022, the top 15 ads alone generated nearly 470 million views, illustrating the substantial long-tail effect. Last year, the Super Bowl event garnered over 115 million viewers, recording over 3 million increase compared to the previous year. 

With all that said, the Super Bowl has been doing its best to make the sporting event “green” and sustainable. 

NFL Leading the Way to Sustainability

In 2022, the NFL, the Los Angeles Super Bowl LVI Host Committee, and Verizon collaborated on greening efforts for Super Bowl LVI. They aimed to enhance air quality, establish community gardens, bolster food security, and restore a California kelp forest. 

Last year, Super Bowl LVII, featuring the Eagles and Chiefs in Arizona, was one of the NFL’s most sustainable efforts yet. The football league has one of the greatest commitments to make the Super Bowl more sustainable. 

The league created the program NFL Green to address the environmental impact of their major sporting events. The initiative leads community projects that restore ecosystems and habitats. These include activities such as tree planting, wildlife habitat restoration, and reforestation projects to plant thousands of trees.

In addition to ecosystem restoration, green energy plays a significant role in NFL Green’s efforts. Annually, the NFL procures Renewable Energy Certificates (RECs) matching the total energy consumption at its events. This strategy enables the NFL to offset the energy usage and greenhouse gas emissions associated with its major sporting events.

RELATED: First NFL Team to Buy Carbon Credits

The NFL, in partnership with Arizonans, aims to achieve 92% waste diversion at the 2023 Super Bowl. Waste management has been a key focus, including recycling, composting, and minimizing landfill disposal.

Super Bowl and the Role of Carbon Credits 

Earlier this year, the Union of European Football Associations (UEFA), the football governing body in Europe, established a climate fund to address the sport’s massive carbon footprint. The $7.6 million fund will address the UEFA EURO 2024 kicking off in Munich on June 14.

The American Super Bowl LVIII committees and the NFL Green implemented the “Green Initiative” at the Las Vegas Indian Center. The initiative aims to plant trees and create green spaces and seedling restoration projects. Highlighting the impact of these efforts, Susan Groh from NFL Green said:

“The Super Bowl is here and gone, but when we are able to implement these greening projects throughout the community, it leaves a lasting legacy and just an impact that lasts for years to come.”

Apart from implementing sustainable practices to reduce its substantial waste and greening projects, the Super Bowl stakeholders are also using carbon credits to offset a portion of their emissions. For instance, Entergy and the Super Bowl XLVII Host Committee purchased carbon offsets to address flight emissions.

The credits are from various offset projects including a landfill gas collection in Texas, a forest conservation initiative in California, and an effort to capture methane from livestock manure in Michigan. The offsets have been certified to deliver the promised carbon reductions by the Climate Action Reserve. NFL is also doing the same when Houston Texans bought carbon credits to offset their air travel emissions.

Each credit bought represents a tonne of carbon emission reduction from specific offset projects, which can be nature-based or technological.

While the Super Bowl shines with sportsmanship and spectacle, its environmental toll is a wake-up call. From celeb jets to advertisement carbon emissions, sustainability is key. NFL’s strides show promise, but climate action must score big.

The post Beyond Touchdowns and Trophies: Unveiling the Carbon Footprint of Superbowl LVIII appeared first on Carbon Credits.

Trust Can Bring Carbon Credit Price to $238/Ton by 2050

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The voluntary carbon market (VCM) faced significant challenges in 2023, leading to ongoing scrutiny and reputational issues. The year 2024 would be pivotal for the market’s future, with confidence in carbon credits playing a decisive role. 

BloombergNEF’s (BNEF) Long-Term Carbon Offsets Outlook 2024 report suggests that restoring trust could drive companies to purchase billions of carbon credits annually. This could potentially elevate prices to $238 per ton and bring market value at over $1.1 trillion annually by 2050. 

However, failure to restore confidence could lead to the demise of the broader market.

Make or Break: Charting the Course for Carbon Credits

According to BNEF, demand is the crucial variable determining the fate of the voluntary carbon market. Despite setting a new annual demand record in 2023, the increase was only marginal compared to previous years.

RELATED: January 2024 Reveals Voluntary Carbon Credit Market Surprises

In fact, that record indicates a market heavily oversupplied by nearly 50%. 

Many companies have shown elastic demand and abandoned offsets due to fear of criticism and rising carbon prices. If this elastic demand persists as prices rise, annual purchases could reach 1 billion offsets by 2030. Further down the road, demand could stabilize at 2.5 billion by 2050.

Kyle Harrison, Head of Sustainability Research at BNEF, emphasized the importance of trust in the market. He noted that governments and investors are eager to monetize emission reductions through carbon credits. However, he highlighted that:

“But if buyers can’t trust the quality of the credits they’re buying and risk greenwashing accusations, then the market will never reach its potential. Credits will never be more than discretionary spend in this case.”

Recent initiatives like the Integrity Council on Voluntary Carbon Markets and guidance from regulators such as the US Commodities Futures Trading Commission are currently focused on bolstering trust in carbon credits. 

Their success could establish carbon credits as a critical component of corporate decarbonization strategies, irrespective of their prices. This creates an inelastic demand. 

This scenario could lead to companies purchasing 1.4 billion credits annually by 2030 and 5.9 billion by 2050.

BNEF Scenarios for Carbon Offset Valuation

Alternatively, the success of these initiatives could position carbon credits as a viable substitute for other forms of abatement. The key driver? Cost. 

This least-cost decarbonization approach might stimulate the purchase of up to 1.6 billion credits in 2030 and 5.1 billion in 2050.

The BNEF report outlines 3 scenarios for future carbon offset prices. This price outlook is based on the market structure and demand dynamics. 

In the ‘High-quality scenario’, integrity issues are resolved and demand is inelastic. Under this scenario, prices start low at $20/ton in 2030 but rise rapidly to $238/ton by 2050. It could potentially lead to a market value of $1.1 trillion annually.

In the ‘Voluntary market scenario’, integrity issues persist and demand is elastic. Thus, prices remain low at $13/ton in 2030 and reach only $14/ton by 2050. This scenario could fuel criticism of carbon credits as a “right to pollute,” with the market peaking at a value of $34 billion annually in 2050.

In the ‘Removal scenario’, companies focus on purchasing carbon removals and credits that are interchangeable with other forms of abatement. Carbon offset prices soar to $146/ton in 2030 and $172/ton in 2050. This last scenario results in a market value exceeding $884 billion annually by 2050. 

The removal scenario is the least-cost scenario. It highlights the importance of addressing integrity issues in the VCM and maintaining strong demand.

Where the Fate of the VCM Hangs

However, the lack of progress at COP28 on Article 6 underscores the significance of the VCM, with the private sector working to position carbon credits as a complement to other decarbonization or carbon emission reduction measures. The success of these efforts could determine whether the private sector achieves its net zero targets. 

Last year, the Voluntary Carbon Markets Integrity Initiative (VCMI) introduced additional guidance for its Claims Code of Practice. It helps companies in making claims about their use of high-quality carbon credits in their net zero strategies. 

Recently, the ICVCM announced its plan to assess 100+ active carbon credit methodologies for adherence to the high-integrity Core Carbon Principles (CCPs). 

READ MORE: Carbon Prices and Voluntary Carbon Markets Faced Major Declines in 2023, What’s Next for 2024?

These developments are critical in shaping the voluntary carbon market landscape, particularly in addressing integrity, quality, and trust issues. 

BNEF provides updates on its historical carbon offset supply and demand data every month and its long-term outlook every year.

The fate of the voluntary carbon market hangs in the balance, with trust and demand serving as linchpins for its future. As initiatives strive to bolster integrity and quality, the market faces a critical juncture that will determine its viability in the journey towards Net Zero.

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