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Monday, September 25, 2023

Study reveals $90bn needed to meet 2030 emissions goal in carbon credit projects

Trove Research’s study reveals a $36 billion investment in carbon credit projects, accelerating with over $18 billion raised in the last 2.5 years, yet an additional $90 billion is needed to meet the 2030 emissions goal.

Carbon credits
Carbon credits

These efforts promise thousands of new carbon reduction projects and significant carbon savings, but global commitments still fall short.

Trove Research’s new study 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 $3bn in future investment already committed.

The 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.

Trove Research unveiled that 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. With over 80% of this funding being targeted in nature-based projects such as afforestation/reforestation, improved forest management and reducing emissions from deforestation and forest degradation. A total of 246 nature-based projects currently cover a total area of 30 million hectares, roughly the same as Italy’s landmass.

Their analysis found that since 2020 more than 1,500 new carbon credit projects have been developed and registered with the five leading carbon registries. This represents an increase of about 160% in the rate of registration compared to the 2012-2020 period. Findings reveal the 1,500 new projects could save as much as 300 million tonnes of CO₂ a year, or roughly the same as the United Kingdom’s annual emissions.

Studies show the current rate of investment in carbon credit projects is only one-third of the level needed to deliver the volume of credits required by 2030 under the agreed upon 1.5 degrees Celsius goal.

Trove Research studies found the world needs a further $90 billion of capital to achieve the necessary volume of credits required under this scenario.

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