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Invert Insights February 3, 2024

High Retirements in the Voluntary Carbon Market, Economist’s Role in Climate Change, and Europe’s Fossil Fuels Phase-Out.

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  • Voluntary Carbon Market sees rapid surge in credit retirements ahead of CPP label launch.
  • Climate Change reshaping economist’s role.
  • Seven NGOs urge Europe to set coal, oil, and gas phase-out dates.

Voluntary Carbon Market Sees Rapid Surge in Credit Retirements Ahead of CPP Label Launch.

In January, retirements of carbon credits from major voluntary carbon registries exceeded issuances, with over 20 million credits retired across Verra, Gold Standard, ACR, and CAR. This marked a decline from December but remained the third-highest retirement month in the past year. Verra led with 13.88 million retirements, followed by Gold Standard, ACR, and CAR. Issuances of 17.5 million credits were evenly distributed among the registries. The market’s surplus credits decreased for the second consecutive month but still exceeded 946 million. Retirements increased in anticipation of the Integrity Council for the Voluntary Carbon Market (ICVCM)’s high-integrity stamp appearing by the end of March. 

Invert Insights:

This increased activity ahead of the launch of the Integrity Council for the Voluntary Carbon Markets (ICVCM) high-integrity stamp likely reflects an anticipation of potential price increases for carbon credits designated as high integrity, as well as concerns regarding the perceived quality of credits without such labels. The introduction of the Core Carbon Principles (CCP) labels is expected to enhance transparency and distinguish higher quality credits, leading to a likely divergence in pricing or willingness to pay for CCP-labeled credits compared to others.

Climate Change Reshaping Economist’s Role.

The Allied Social Science Association conference showcased a surge in climate-related research among economists, reflecting a growing recognition of climate change’s multifaceted impacts. Topics such as natural disasters’ effects on mortgage risk and railway safety, ESG investing, and going beyond traditional carbon pricing approaches were discussed. Despite past delays, economists aim to provide valuable insights to guide effective climate policies and address societal challenges.

Invert Insights:

Notably, the influence of climate change has shifted the landscape in economics. Economists are now at the forefront, integrating climate risks into their analysis and recognizing the potential of investing in ESG developments. This marks a pivotal moment where traditional economic models are evolving to embrace sustainability and resilience as core principles.

Seven NGOs Urge Europe to Set Coal, Oil, and Gas Phase-out Dates.

Seven NGOs are asking the European Commission to establish clear phase-out dates for fossil fuels in Europe’s 2040 target. Following COP28’s emphasis on transitioning away from fossil fuels, the NGOs advocate for coal phase-out by 2030, gas by 2035, and oil by 2040. They argue these goals are technically feasible and essential for aligning with the 1.5°C target. The NGOs stress the need for the Commission’s communication to include these phase-out dates, ensuring long-term investment certainty and enabling a just transition to renewable energy. The European Union’s commitment to decarbonization is evident through proposed energy infrastructure projects prioritizing renewables. These initiatives aim to shift investments away from fossil fuels, supporting the EU’s net-zero goals and enhancing energy independence and resilience.

Invert Insights:

Setting dates for ambitious targets is crucial for aligning policies with climate goals and driving investment to make them a reality. It is also essential to hold policymakers accountable for taking decisive action to address climate change. However, the energy transition is more complex than that. It is necessary to take a balanced approach that considers the environmental and social impact of renewable energy technologies, such as mining for critical minerals, and to work on strategies that minimize negative impacts as much as possible. Collaboration between stakeholders, including NGOs, policymakers, industry players, and communities, is crucial to developing solutions that prioritize both environmental sustainability and social equity.

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