Investment trends and outcomes in the global carbon credit market

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A new study by Trove Research finds that investment into carbon credit projects between 2012 and 2022 totalled $36 billion, with half of this occurring in the last three years and more than $3 billion in future investment already committed. This new wave of investment will deliver more than a thousand new carbon reduction projects, ranging from forest protection to carbon capture and storage, and will provide a growing stream of carbon credits that corporates can use in their decarbonisation efforts.

Purchasing carbon credits, which fund projects around the world like protecting rainforests from deforestation or providing clean cooking stoves, is one of the most established and scalable ways to channel finance to effective climate outcomes. As a result, the voluntary carbon market has experienced explosive growth since nations agreed in 2021 on a set of guidelines for the global carbon credit market under Article 6 of the Paris Agreement. Countries are busy setting out the legal framework for a UN-regulated market in carbon credits, while also putting in place the structures to support climate investment on the ground.

Progress on the regulatory side has triggered a wave of financial commitments in carbon abatement. More than $18 billion of investment capital has been raised to invest in carbon credit funds in the last two and a half years alone, according to the survey, commissioned by IETA, Verra and Sylvera.

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