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Carbon Markets: Trends and Growth Opportunities

  • Report

  • 60 Pages
  • March 2024
  • Region: Global
  • Frost & Sullivan
  • ID: 5950567

Carbon Pricing Operates as an Instrument to Tackle Emissions and Accelerate the Transition to Net Zero

Carbon markets are trading systems that use greenhouse gas (GHG) emissions as a commodity, setting a price on them based on the value of the emitted carbon dioxide. Companies can purchase and sell carbon credits or carbon offsets to compensate for their GHG emissions. There are two main types of carbon pricing initiatives, mandatory and voluntary, resulting in two types of carbon markets, mandatory carbon markets (MCMs) and voluntary carbon markets (VCMs).

Carbon markets are a cost-effective way to reduce GHG emissions and support sustainability drives. Evolving carbon pricing initiatives, both mandatory and voluntary, are expected to make a significant contribution to helping governments and corporations across the world achieve net-zero targets as the deadlines to meet them get closer. Estimated at $821 billion in 2023, the carbon market is set to reach $1750 billion by 2030. MCMs will expand in both size and sector coverage due to increasing demand and new government regulations.

This study delves into the mechanics of MCMs and VCMs, analyzing the factors that drive their expansion and the barriers that restrain their growth. The study identifies the growth opportunities emerging from the changes in this space and outlines key initiatives, prominent players, and noteworthy projects. It analyzes the prevailing trends reshaping the landscape (such as the convergence of MCMs and VCMs, the use of digital technologies, and the shift from nature-based to technology-based credits) and forecasts the trajectory of the market, projecting its evolution up to 2030.

Table of Contents

Strategic Imperatives
  • Why is it Increasingly Difficult to Grow?
  • The Strategic Imperative 8™
  • The Impact of the Top 3 Strategic Imperatives on Carbon Markets
  • Growth Opportunities Fuel the Growth Pipeline Engine™
  • Scope of Analysis
  • Segmentation
  • Key Predictions
Growth Environment: MCMs
  • MCM Instruments
  • Coverage Provided by Carbon Pricing Initiatives
  • Carbon Pricing Initiatives
  • Key MCMs: EU
  • Key MCMs: United States
  • Key MCMs: China
  • Key MCMs: United Kingdom
  • Key MCMs: South Korea
  • Key MCMs: Japan
  • Key MCMs: New Zealand
  • Key MCMs: Australia
  • Other Relevant MCMs
Growth Environment: VCMs
  • Voluntary Carbon Instruments
  • Nature-based Solutions and Technology-based Solutions
  • VCM Locations
  • Key Certification Standards
  • VCM Structure
  • Key Carbon-offsetting Projects 2023
  • Buyers of Carbon Offsets
Growth Opportunity Analysis
  • Revenue Forecast: Carbon Markets
  • Revenue Forecast: MCMs
  • Revenue Forecast: VCMs
  • Growth Drivers
  • Growth Restraints
Key Trends in Carbon Markets
  • Trend 1: Convergence of VCMs and MCMs
  • Trend 2: Digital Technologies for Carbon Reporting, Monitoring, and Tracking
  • Trend 3: VCMs: Shift from Reduction and Avoidance to Removal
  • Trend 4: VCMs: Shift from Nature-based Credits to Technology-based Credits
  • Trend 5: Higher Standardization across Voluntary Carbon Credits
Growth Opportunity Universe
  • Growth Opportunity 1: Expansion of MCM Coverage to Smaller Emitters
  • Growth Opportunity 2: Digital Technologies in VCMs
  • Growth Opportunity 3: Tailored Portfolio
  • Partial List of Acronyms
  • List of Mandatory Carbon Pricing Initiatives: ETS
  • List of Mandatory Carbon Pricing Initiatives: Carbon Taxes
List of Exhibits