Carbon Market Reflections to Start the Year
Gordian Knot Strategies
We are Igniting Climate Solutions: Mobilizing $1 Billion Per Year in Impact Investment by 2030!
As we bid farewell to the inaugural month of the year, January, we find ourselves propelled full steam ahead into the promising calendar of 2024.
The dawn of this new year brought not only fresh perspectives and efforts but also the welcome addition of new clients to our esteemed roster.?
In the coming months, our collaborative efforts will focus on initiatives spanning sustainable agriculture for smallholder farmers, the exploration of innovative carbon credit projects, the development of carbon market webinars, and a myriad of other impactful endeavors.?The start of 2024 marks the beginning of exciting partnerships and ventures that align with our commitment to driving positive change.
This month, in “Our Take” we share our thoughts on carbon markets, including where they are and where they might go. The full article can be found below. In addition, Jay spoke with Dr. Lambert Schneider in an in-depth conversation on our Untangling Climate Finance podcast about carbon markets. A link to the conversation is also below.
All the best,
Gordian Knot Strategies
We are Igniting Climate Solutions: Mobilizing $1 Billion Per Year in Impact Investment by 2030!
Carbon offsetting involves individuals, companies, or organizations investing in projects aimed at reducing or capturing an equivalent amount of greenhouse gas (GHG) emissions to offset their residual and hard-to-abate emissions. This practice is undertaken to compensate for their carbon footprint, ultimately contributing to the mitigation of the overall environmental impact. Carbon credits, each representing 1 tonne of CO2 equivalent GHG emissions, symbolize these offsets and are traded within both voluntary and compliance markets.
Antonio Guterres, UN Secretary General pointed to the vital role of carbon markets at the launch of the IPCC Sixth Assessment report in March of 2023. He referred to carbon markets as the ‘net in net zero,’ adding, “Our world needs climate action on all fronts: everything, everywhere, all at once.”
Under the Paris Climate Agreement, Article 6 allows countries to engage cooperatively to achieve their Nationally Determined Contributions (NDCs) either directly or through the use of carbon markets. Article 6 aims to empower parties to achieve more than they could individually through the implementation of their NDCs, fostering greater ambition and efficiency in resource allocation among cooperating parties. Article 6 created two primary pathways for cooperation embodied in Articles 6.2 and 6.4.
To read more, click here.
Client Served in the United States
America Forest Foundation (AFF), a national forest conservation organization, engaged our support in designing a national carbon credit financing mechanism to incentivize small forest landowners to adopt conservation practices. Launched in 2018 as a partnership between The Nature Conservancy (TNC) and AFF, this effort grew into AFF’s well-known Family Forest Carbon Program (FFCP) that is scaling nationwide. FFCP aims to catalyze the widespread activation of family lands in the U.S. as a natural climate solution, such that an additional 1 billion tonnes of CO2e will be sequestered and stored by 2050. Our multi-year engagement with the wonderful teams at AFF and TNC has drawn on our expertise on climate finance, carbon markets and policy, impact investment structures, and go-to-market advisory services.
“Gordian Knot Strategies’ work on the financial model for our program allowed us for the first time to chart a viable course to implement and scale the program. Before working with GKS, we had a good idea with no way to implement. Now we have a much more concrete road map.”
Nathan Truitt – Executive Vice President, Climate Funding, American Forest Foundation
In our most recent episode,?Jay?and?Dr. Lambert Schneider?connect to discuss carbon markets.
Dr. Schneider is the?Research Coordinator for International Climate Policy?at the Oko-Institut e.V. He has most of his career working on the various carbon markets around the world. Dr. Schneider covers various aspects of the complex carbon market sphere.
Dr. Schneider demonstrates his extensive expertise in every response, sharing his concerns about certain market elements and his hopes for the future of the markets.
Click any of the links below to listen!
领英推荐
??? California has set a target to achieve 100% clean energy by 2045, yet significant progress is required. Given its extensive coastline, the state is exploring the potential of harnessing ocean power. In “Can we turn ocean waves into energy?” Bay Curious by KQED explores past and current efforts to tap into wave energy, questioning whether this technology is on the verge of a breakthrough.?
??? With the low-cost points and widespread availability of clean energy, the transition off fossil fuels seems easy enough. However, in many circumstances, it is not. Switched On (from Bloomberg News) explores this topic in “Gas Versus Solar: South Africa’s Battle to Ditch Coal.” The episode looks at South Africa's continued reliance on fossil fuels for power, the recent shift in energy priorities with reduced utility-scale solar targets, and a surge in smaller rooftop installations. The conversation also explores South Africa's appeal as a renewable energy investment compared to other markets in the region.
?? Mitigation is often the focus when it comes to climate change and impacts. Adaptation, however, is also crucial and requires our focus, especially in regions around the world that are already feeling the terrible effects of global warming. Published at the tail end of last year, Climate Policy Initiative’s “State and Trends in Climate Adaptation Finance 2023” report examines the global landscape of adaptation finance, with a special focus on Africa due to its increased adaptation requirements and opportunities.?One key takeaway is that mitigation finance has experienced a large surge, reaching USD 1.2 trillion annually over the past two years, but in contrast, adaptation finance saw only a moderate increase.
Below are some of the major, recent climate finance deals and updates.
In a historic move, Switzerland and Thailand have executed the transfer of carbon credits under Article 6.2, signifying the initial transaction for emissions reductions within the framework of the Paris Agreement. The KliK Foundation, based in Switzerland, confirmed on January 8 that it acquired the first Internationally Transferred Mitigation Outcomes (ITMOs) from Energy Absolute Public Co. Ltd., a Thai company, for the Bangkok E-Bus Program. The agreement involves the procurement of 1,916 ITMOs, officially credited to the KliK Foundation's account in the Swiss Emissions Trading Registry on December 15, 2023.?
Bregal Investments, a prominent private equity investment firm, has unveiled the Bregal Sphere's Nature strategy, a specialized natural capital strategy concentrating on high-quality nature-based solutions. The firm also announced the appointment of Agustin Silvani, former head of Conservation Finance at Conservation International, as the joint Managing Partner, alongside Alvar de Wolff.
The African Development Bank and the United Kingdom have chosen the Gas Insulated Switchgear Substations Project in Mauritius as a recipient project under the Room to Run Sovereign transaction (R2RS). This designation enables the climate mitigation component of the $110 million total project cost to be supported up to 100%, thanks to the additional capital unlocked by the UK Government guarantee.
Disclaimer: Hi there, you are receiving this update from Gordian Knot Strategies based on your previous engagement with us in some capacity. If you wish to unsubscribe, please use the link below, and we promise you that your contact details will be permanently removed from our distribution list. Thanks!
Want to unsubscribe?
Click here.
Want to receive this newsletter?
Click here.
If you want to see more of our content, check out our weekly dispatch, Sliced.
Click here.
Interested in connecting? We would love to hear from you!
Contact us here.