The global Climate And Carbon Finance Market is estimated to be valued at US$ 459.58 Mn in 2023 and is expected to exhibit a CAGR of 29. % over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Climate and carbon finance market deals in financial products and services that help reduce greenhouse gas emissions and support climate action. Carbon finance involves trading of carbon credits wherein a carbon credit represents one ton of carbon dioxide or its equivalent in other greenhouse gases that has been avoided or removed from the atmosphere. Various nations and organizations have adopted climate finance mechanisms to meet emission reduction targets and transition to low carbon economy. Carbon trading and pricing provide financial incentives for emission reduction activities like renewable energy, energy efficiency, and forestation.
Market key trends:
One of the major trends in the climate and carbon finance market is increasing adoption of carbon trading programs globally. Countries like China, South Korea and Japan have established national emission trading schemes. The European Union Emission Trading System remains the largest cap-and-trade program. Voluntary carbon markets are also witnessing strong growth as more companies aim to achieve carbon neutrality through purchase of verified emission reductions. Growing focus on corporate sustainability is further boosting climate finance. Large investors are also allocating more capital towards green projects and climate-aligned investments in compliance with ESG benchmarks. Development of new carbon offset protocols also allows greater participation from sectors like agriculture and forestry in carbon markets.
Porter’s Analysis
Threat of new entrants: Low capital required and existing patents may allow new companies to enter the market and compete. However, established players have significant brand recognition and resources which provide barriers.
Bargaining power of buyers: Individual consumers have low bargaining power due to the numerous options available. However, large corporations and governments purchasing carbon credits in bulk have significant influence over prices.
Bargaining power of suppliers: A large number of forestry projects and individuals generating carbon offsets provides significant choice for buyers. However, trusted validation is important giving suppliers without accreditation little power.
Threat of new substitutes: Other emerging technologies in green financing and carbon removal may provide alternatives but carbon markets still offer the most cost-effective and scalable solution currently.
Competitive rivalry: Large players compete on price, validation methods and regional presence driving down margins. However, differentiated offerings around bundled solutions and sustainability outcomes retain some customers.
Key Takeaways
The global Climate And Carbon Finance Market is expected to witness high growth, exhibiting CAGR of 29.% over the forecast period, due to increasing environmental regulations around the world to meet climate targets. The market size for 2023 is estimated to be US$ 459.58 Mn.
Europe dominates currently due to ambitious commitments in the EU Emissions Trading System and presence of pioneers such as the United Kingdom. However, China and other Asian markets are emerging rapidly supported by government mandates and the emergence of carbon trading platforms. The Americas are also significant led by commitments in jurisdictions like California.
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). These players compete based on their geographical reach, verification methods and ability to bundle finance with carbon credits and solutions.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
