Scaling carbon removal marketplaces will be key to tackling climate change

The years ahead will be an era of opportunity in the fight against climate change, but the window of opportunity won’t last long. The 2015 Paris Agreement set a goal of limiting global temperature increases to under 1.5 degrees Celsius to avoid the worst impacts of climate change, and time is running out to develop a sustainable economy that drives to that goal.

Reversing these trends and transitioning to a low-carbon environment is going to require a consistent, collective effort across government, the corporate community, and broader society.

Capital markets have an essential role to play. As the demand for new energy solutions continues to grow, we will see the creation of new markets that will facilitate efficient capital allocation and the meeting of supply and demand.

At the critical intersection of markets, technology and finance, Nasdaq will play a role in facilitating this transition, bringing together innovators, financiers, and investors through foundational market infrastructure where climate capital can be allocated towards climate innovation.

In doing this, we also believe it is critically important that we create a path that brings all stakeholders along on this journey – both new and emerging companies that are founded around a low carbon vision as well as the traditional energy companies that can have a tremendous impact in driving and funding innovation towards a decarbonized future economy.

And while low and zero carbon energy solutions are core to this, carbon reduction alone will not get us where we need to be.?

The climate challenge requires us to embrace a diverse set of climate solutions, including leveraging the potential of carbon removal technologies that physically capture CO2 from the atmosphere, stabilize it, and place it in durable storage. This is both a critical imperative to protect the planet – and an historic investment opportunity.

This is where markets can become an important accelerant. By unleashing the power of markets, we can accelerate innovation at the level and scale needed to change the trajectory we are currently on. As a reminder of the scale of the challenge in front of us – the science tells us that the 1.5-degree scenario will require 5 Gigaton of carbon to be removed by 2050. It is no wonder that the carbon removal market is expected to grow to $20 billion by 2030, up from the $1 billion market it is today.

This is where exchanges can help. People rightly think about Nasdaq as the world’s first electronic exchange. But our identity today extends far beyond that: we are a technology company that has embraced the power of innovation to reimagine financial markets for more than five decades. We are now helping to usher in the next evolution with our carbon removal marketplace, Puro.earth — the world’s first marketplace and standards provider focused solely on carbon removal.

As we look at the scale and pace of innovation that is required to change the climate trajectory, we will embrace our role in facilitating more companies and investors to tap into the power of markets to fund and accelerate innovation, driving both meaningful impact in the battle against climate change as well as compelling opportunities for sustainable value creation.