Fixing the messy voluntary carbon market

The market for higher-quality credits is growing, but Lowercarbon’s Ryan Orbuch argues the legacy market still needs major reform.

An episode of the Catalyst with Shayle Kann podcast, hosted by Latitude Media, titled "Fixing the messy voluntary carbon market" was published on January 4, 2024 and runs 48 minutes.

January 4, 2024 ·48m · Catalyst with Shayle Kann

Summary

The voluntary carbon market is a mess. Oil majors, big tech, and many other industries purchase voluntary credits hoping to offset their carbon emissions. But years of reporting have revealed major problems in the industry, from worthless credits to outright fraud. Amid allegations that many of its credits might actually worsen global warming, the CEO of the largest issuer of credits, Verra, resigned last year. And so perhaps it’s no surprise that the market for traditional offsets like renewable energy credits and avoidance credits shrank in recent years. Yet the market for a newer type of credit, carbon removal, is actually growing.  So what’s behind this bifurcation in the market? And are the voluntary carbon markets fixable? In this episode, Shayle talks to Ryan Orbuch, partner at Lowercarbon Capital. He leads the firm’s carbon removal work. Ryan argues the market is fixable with major reforms, like overhauling incentives and ditching the idea that the voluntary carbon market can offset buyers’ emissions with as many cheap credits as needed.   Shayle and Ryan cover topics like: The bad incentives underlying the problems with the current market. The role of credit-rating agencies in the market. Ryan’s ideas for designing a better market from scratch, including ex-post payments, modular protocols, and a feedback loop for improving supplier methods. The potential challenges with these approaches, like financing prior to payment and uncertainty in credit delivery as protocols change. Companies that are pioneering some of these approaches, like Isometric’s new protocol for the bio-oil geological storage technique used by Charm Industrial. Recommended Resources: The New Yorker: The Great Cash-for-Carbon Hustle UC Berkeley: Reducing Emissions from Deforestation and Forest Degradation (REDD+) Carbon Crediting CDR.fyi Isometric: Aligning incentives Sign up for Latitude Media’s Frontier Forum on January 31, featuring Crux CEO Alfred Johnson, who will break down the budding market for clean energy tax credits. We’ll dissect current transactions and pricing, compare buyer and seller expectations, and look at where the market is headed in 2024. Sign up for Latitude Media’s newsletter to get updates on the tech and business frontiers of the climatetech industry. Catalyst is supported by Antenna Group. For 25 years, Antenna has partnered with leading clean-economy innovators to build their brands and accelerate business growth. If you’re a startup, investor, enterprise or innovation ecosystem that’s creating positive change, Antenna is ready to power your impact. Visit antennagroup.com to learn more. Catalyst is brought to you by Atmos Financial. Atmos is revolutionizing finance by leveraging your deposits to exclusively fund decarbonization solutions, like residential solar and electrification. Market-leading savings rates, cash-back checking, and zero fees. Get an account in minutes at joinatmos.com.

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