The climate and carbon finance market incorporates carbon credit trading to reduce greenhouse gas emissions. It allows countries and organizations to trade carbon credits generated by climate change mitigation projects like renewable energy development, industrial carbon capture, and afforestation programs. New afforestation projects actively sequester and store carbon in plants and soil, removing CO2 from the atmosphere.
The global climate and carbon finance market is estimated to be valued at US$ 367 Bn in 2023 and is expected to exhibit a CAGR of 33.7% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
Carbon sequestration through new afforestation projects remains a key driver in the climate and carbon finance market over the forecast period. Planting new forests significantly contributes to reducing atmospheric carbon as trees absorb CO2 to facilitate photosynthesis growth. As afforestation programs expand globally to meet climate targets, the amount of carbon credits generated and traded in this market is projected to increase substantially. Countries and organizations are turning to forestry-based mitigation activities to offset emissions and meet commitments under the Paris Agreement, accelerating growth opportunities in the climate and carbon finance sector.
SWOT Analysis
Strength: Climate and carbon finance market helps reduce carbon emissions and addresses climate change. It provides financial incentive for individuals and organizations to invest in renewable energy and low carbon projects.
Weakness: Difficulty in accurately measuring and verifying the amount of carbon credits/offsets generated. Lack of transparency in the transactions.
Opportunity: Increasing focus on net zero emissions targets by governments and organizations worldwide is driving more investment in this market. Growing carbon pricing initiatives also open up opportunities.
Threats: Changes in regulations around carbon credits and offsets poses a risk. Economic downturns can reduce funding available for climate projects.
Key Takeaways
The Global Climate And Carbon Finance Market Size is expected to witness high growth over the forecast period of 2023 to 2030. The global climate and carbon finance market is estimated to be valued at US$ 367 Bn in 2023 and is expected to exhibit a CAGR of 33.7% over the forecast period 2023 to 2030.
Regions like North America and Europe currently dominate the market due to stringent climate policies and carbon pricing programs. The North America region accounted for around 35% of the total market share in 2023 due to presence of major carbon credit trading platforms and investments in renewable energy projects.
Key players like Climate Finance Partners, Carbon Credit Capital and ClimateCare have played a leading role in channeling finance towards low carbon projects across various sectors. Looking at the climate targets, the demand for carbon offsets and credits is expected to drastically increase in the coming years. New compliance carbon markets are also being established which will further boost investments.
Key players operating in the climate and carbon finance market are Climate Finance Partners (United States), Carbon Credit Capital (United States), ClimateCare (United Kingdom), South Pole Group (Switzerland), Climate Trust Capital (United States), Carbon Clear (United Kingdom), EcoAct (France), First Climate (Germany), ClimatePartner (Germany), Ecosphere+ (United Kingdom), Verra (United States), Gold Standard (Switzerland), Natural Capital Partners (United Kingdom), Climate Friendly (Australia), Forest Carbon (United Kingdom).
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. With an MBA in E-commerce, she has an expertise in SEO-optimized content that resonates with industry professionals.