Voluntary carbon markets are growing quickly. But before taking the leap, startups need to do their homework.
The pressure is on for countries and corporations to slash greenhouse gas (GHG) emissions. Earlier this month, the World Meteorological Organization reported that weather-related disasters have increased fivefold over the last 50 years. The recent flooding in Pakistan, record temperatures in Britain and forest fires in California have shown what’s at stake. Action on the climate has never been more urgent.
In a bid to reduce emissions and achieve net zero by 2050, many companies are purchasing carbon credits in the voluntary carbon market — effectively paying someone else to offset emissions on their behalf. For cleantech firms, this presents a business opportunity.
Voluntary carbon markets are nascent but are showing strong growth — transactions last year were three times the previous year, surpassing U.S.$1 billion. Halifax-based CarbonCure, which landed a U.S.$30-million agreement with Invert and Ripple last April, was one of the highlights. However, the markets are also quite volatile, and there’s much work being done to build in more rigour and integrity into a process that has sometimes been questionable.
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