Sustainable Markets: Insights into the United States of America's Environmental Trends

As two leading players in the voluntary carbon market, AlliedOffsets and ACX (AirCarbon Exchange) are partnering to provide you with insights into the latest developments, project activities, pricing trends, project locations, and project statuses within the voluntary carbon market.

In this month's newsletter, we will explore the unique challenges and opportunities in each region, showcasing the overall VCM activity in a specific country. This month we are looking at the United States, offering readers an extensive overview of the country’s carbon offset projects, top buyers and overall issuances as well as retirements.

Regional Project Overview

The United States

The year 2023 was a hallmark for retirements from projects based in the United States, and as of this month, there are over 700 active projects and another 250 pending projects in the region. The majority of projects are from the forestry and land use sector, as well as the chemical sector.

Some of the top buyers in the US, including LSB Industries, Takeda and ALT Holdings, account for just under 15 million credits over the last few years.

Carbon Markets in the US

The United States has set ambitious climate goals, aiming to cut greenhouse gas emissions by an estimated 50-52% from the levels achieved in 2005, by the year 2030 and to achieve a total net-zero emissions economy by 2050. Part of this effort towards net-zero includes the SEC's new rules requiring public companies to disclose any and all climate-related information, such as carbon credits and renewable energy credits (RECs). These disclosures are expected to incentivise more public companies to price their emissions and take further positive climate action, thereby enhancing transparency and accountability in corporate environmental practices.

While the United States currently lacks a national carbon tax, several states have taken the initiative to implement their own carbon pricing schemes. Specifically, twelve states, which collectively represent over a quarter of the U.S. population and a third of its GDP, have active carbon-pricing programs. These initiatives employ cap-and-trade mechanisms, effectively contributing to the reduction of emissions.

The Regional Greenhouse Gas Initiative (RGGI) stands as the pioneering regional and mandatory cap-and-trade program in the United States, aimed at capping and reducing CO2 emissions from the power sector. Consisting of eleven states including New York, New Jersey and Massachusetts, the RGGI operates through collaborative efforts toward achieving net-zero emissions. In 2024, the cap for the eleven participating RGGI states stands at 157,184,044 CO2 allowances (metric tonnes emitted from regulated sources).

In parallel, California's emissions trading program emerges as the first multi-sector cap-and-trade initiative in North America. This initiative institutes a diminishing cap on significant greenhouse gas (GHG) emission sources across the state, while simultaneously fostering a robust economic incentive for investment in environmentally sustainable technologies.

Meanwhile, states like Washington and Oregon are currently in the process of developing similar initiatives. These collective efforts highlight a resolute regional commitment to combatting climate change, serving as blueprints for potential national policies in the future.

In a recent address, Secretary Janet L. Yellen of the United States Treasury emphasised the pivotal role of high-integrity VCM in addressing the urgent challenge of climate change, providing positive market signals to a currently stagnating VCM. The Biden Administration's commitment to robust climate action emphasises the significance of VCMs in mobilising private finance towards impactful climate solutions.

Vote for ACX as the "Best Carbon Exchange" category in Environmental Finance's 2024 awards ! We would appreciate your vote for ACX as "Best Carbon Exchange" category in Environmental Finance's 2024 awards . Achieving this accolade for the fourth consecutive year would be an incredible honour and a testament to our unwavering dedication to the voluntary carbon markets!

ACX, a global voluntary carbon exchange, serves as a central hub that seamlessly connects project developers, corporations, financial institutions, and traders. Our platform facilitates efficient and cost-effective credit trading. Over the past year, ACX has expanded our reach and collaborations, working with esteemed exchanges such as ATHEX in Greece, B3 in Brazil, and IDX in Indonesia. These partnerships underscore our commitment to fostering a robust and accessible carbon market worldwide.

Thank you for your continued support. Your vote and trust in ACX help us drive innovation and excellence in the voluntary carbon trading landscape. Vote for us at: https://www.surveymonkey.com/r/VCM24