Traditionally, December is the month for market reflections and industry projections. The fast-moving voluntary carbon market (VCM) warrants more frequent checkups. June concludes the first six months of 2023, which seems the perfect moment to take stock of the state of the market and draw a deep breath before diving into the year’s second half.
“Carbon credit markets have always involved risks for both sellers and buyers. For sellers, the number of credits generated from a project is often lower than expected, impacting its financial performance. The credits a company buys may be subject to external criticism, causing reputational damage. New products are now being developed to insure against different risks faced by buyers, such as losses due to third-party negligence or fraud. Such measures aim to encourage more investment into emission-reduction projects.”
– World Bank, The State and Trends of Carbon Pricing 2023
Given the urgency of the climate crisis, we cannot afford to have this same conversation in December 2023. The best time to de-risk the VCM was yesterday. The next best time is now.