March 1, 2024
Climate and Carbon Finance Market

Climate And Carbon Finance Market Is Driven By Increasing Government Initiatives For Carbon Reduction

The Climate And Carbon Finance Market involves financing projects related to climate change mitigation and adaptation initiatives. This includes financing projects related to renewable energy, energy efficiency, sustainable transportation, green buildings, reforestation, and reducing emissions from deforestation and forest degradation (REDD). Projects in this market help reduce greenhouse gas emissions and promote low-carbon development. The products in this market include carbon trading, carbon taxation, carbon offsets, climate financing, and others. Carbon trading allows emitters to buy credits from other organizations that have reduced emissions, providing flexibility to meet emission caps. Carbon taxation directly prices greenhouse gas emissions. Offsets provide a way for emitters to cancel out their emissions by funding emissions-reduction projects elsewhere. Climate financing provides funds to developing countries to build climate-resilient infrastructure and transition to greener economies.

The global Climate And Carbon Finance Market is estimated to be valued at US$ 459.58 Mn in 2023 and is expected to exhibit a CAGR of 3.6% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:

One of the key trends in the Global Climate And Carbon Finance Market Size is the rise of voluntary carbon markets. With many countries and organizations pledging to achieve net-zero emissions by 2050, demand for offsets to meet these pledges is growing rapidly. Voluntary carbon markets allow organizations to buy offsets even if they are not governed by strict compliance carbon markets and emission trading schemes. According to reports, the volume of credits traded in voluntary carbon markets in 2020 was 101 million metric tons of CO2e, marking a year-on-year increase of 65%. Projects related to forestry and land use made up the majority (71%) of credits transacted. The rapid growth of the voluntary carbon markets reflects the broader shift in corporate strategies and policies towards carbon neutrality goals. This key trend will likely continue driving the Climate And Carbon Finance Market’s growth over the forecast period.

Porter’s Analysis

Threat of new entrants: The climate and carbon finance market requires high initial capital investments and strict regulatory compliances which make it difficult for new players to enter the market.
Bargaining power of buyers: Large corporations and governments have significant bargaining power as buyers in this market due to the requirement for customized carbon credit solutions.
Bargaining power of suppliers: The presence of many small companies offering carbon credits for compliance gives suppliers moderate bargaining power in the market.
Threat of new substitutes: There are no close substitutes for carbon credits currently, reducing threats from substitutes.
Competitive rivalry: Being a niche market, competitive rivalry is high among existing players to capture more market share.

Key Takeaways

The global Climate And Carbon Finance Market is expected to witness high growth. The global Climate And Carbon Finance Market is estimated to be valued at US$ 459.58 Mn in 2023 and is expected to exhibit a CAGR of 3.6% over the forecast period 2023-2030.

Regional analysis: North America dominated the market in 2023 due to strict climate regulations in the US and Canada. Asia Pacific is expected to be the fastest growing region owing to government initiatives in countries like China and India to meet their Paris Agreement commitments.

Key players: Key players operating in the Climate And Carbon Finance Market are International Paper Company, Georgia-Pacific LLC, Foresight Carbon Management, 3Degrees, Natural Forest Services, Carbon Capital Markets, EcoAct, Carbon Direct, Forte Capital Group. International Paper Company and Georgia-Pacific LLC are two of the largest players in the carbon offsets market.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it