2024 a Make-or-Break Year for Carbon Markets

BloombergNEF’s (BNEF) Long-Term Carbon Offsets Outlook 2024 report has warned that the success of the carbon credit market this year will depend on the market’s ability to rebound from recent scrutiny and reputational issues. Despite questions surrounding the integrity and transparency of carbon credits, 2023 set a new annual demand record of 163.6 million credits, but the market was nearly 50% oversupplied, the report said. However, should confidence in carbon markets be fully restored, demand could increase to as much as 2.5 billion credits a year by 2050. “There is no shortage of governments and investors that are eager to monetise emission reductions through carbon credits and channel financing towards projects,” said report author Kyle Harrison, Head of Sustainability Research at BNEF. “But if buyers can’t trust the quality of the credits they’re buying and risk greenwashing accusations, then the market will never reach its potential. Credits will never be more than discretionary spend in this case.”

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