Climate And Carbon Finance is Estimated to Witness High Growth Owing to Opportunity to Achieve Carbon Neutrality
Climate and carbon finance market involves the development, purchase and trading of carbon credits to offset greenhouse emissions. These credits represent the right to emit a certain volume of greenhouse gases. Enterprises use this mechanism to meet their emission reduction targets in a cost-effective manner. The increasing emphasis on reducing carbon footprint and adoption of renewable energy sources are propelling the demand for carbon credits.
The global climate and carbon finance market is estimated to be valued at US$ 459.58 million in 2023 and is expected to exhibit a CAGR of 3.6% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity
To Achieve Carbon Neutrality:
More and more countries and organizations are pledging to achieve net zero emissions or carbon neutrality in the coming decades in order to limit global warming. This immense target of carbon neutrality can only be achieved with the help of carbon offset programs and trading of carbon credits. According to estimates, annual investment requirement in climate finance will have to be increased from current $579 billion to over $4 trillion by 2030 to achieve the net zero emissions target. The huge funding gap and urgency to reduce emissions provides a massive market opportunity for Global Climate And Carbon Finance Market Size through development and trading of carbon offsets. These offsets will help balance the emissions from hard-to-abate sectors and industries, thus playing a key role in achieving carbon neutrality target across the globe.
Porter’s Analysis
Threat of new entrants: The threat of new entrants is moderate as large initial investments are required for funding and developments. However, growth opportunities attract new ventures.
Bargaining power of buyers: The bargaining power of buyers is high due to availability of substitutes and transparency in carbon credit pricing. Buyers can negotiate for better deals and prices.
Bargaining power of suppliers: The bargaining power of suppliers is moderate as major suppliers have established presence. However, new localized suppliers provide alternatives.
Threat of new substitutes: The threat of substitutes is high as renewable sources of energy offer low-carbon alternatives to traditional fuels. Technological advancements spur new innovations.
Competitive rivalry: Competition is fierce as key players compete on pricing, strategies and portfolios. Market consolidation is witnessed through partnerships.
SWOT Analysis
Strength: Large scale afforestation drives increasing supply of carbon credits. Growing carbon regulatory policies mandate offsetting emissions.
Weakness: Carbon credit pricing is volatile depending on global economic conditions. Verification and additionality principles involve significant costs.
Opportunity: Emerging markets in Asia and Africa offer scope for investments. Carbon removal through technologies present new avenues.
Threats: Geo-political risks and policy changes impact overseas projects. Public opinions influence environmental regulations.
Key Takeaways
The global Climate and Carbon Finance Market is expected to witness high growth over the forecast period of 2023 to 2030. The market size for 2024 is estimated to be US$ 459.58 Mn registering a CAGR of 3.6%.
North America dominates the market currently owing to stringent environmental policies and presence of key players. The region is expected to maintain its leading position over the coming years as well. Asia Pacific is identified as the fastest growing region in the Climate and Carbon Finance Market owing to rapidly growing industrial and energy sectors in major economies like China and India. Rapid urbanization and economic development have increased emissions necessitating offsetting through carbon credits in the region. Countries like China, India and South Korea are actively participating in UNFCCC programs.
Key players: Key players operating in the Climate and Carbon Finance Market include International Paper Company, Georgia-Pacific LLC, Kimberly Clark, Weyerhaeuser Company, Svenska Cellulosa Aktiebolaget (SCA), Procter & Gamble etc. These players are focusing on portfolio expansion through acquisitions and partnerships to strengthen their market presence. For instance, in 2022, Kimberly Clark acquired Safety Company to enhance its product offerings in the away from home business.
Get More Insights On This Topic: https://www.newswirestats.com/climate-and-carbon-finance-market-forecast-outlook-trend-2023-2030-2/
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