As the 26th UN Climate Change Conference wraps up, ESG is becoming an increasing driver in how companies operate, leading them to buy credits to offset their current carbon emissions as they target sustainable reduction of greenhouse gases.
Kambeitz explained why there has been a recent boom in voluntary carbon credits.
Similar to the compliance carbon credit market, the voluntary market is governed by independent third parties following their rules and procedures.
The farm gate, the forestry gate, the mining gate and the concrete industry, are all examples,” he said.
“They then go to an aggregator who will go to an industry, and that corporation will collect a variety of carbon credits and move them into blocks.
Kambeitz discussed the new investment opportunities in the carbon offset market compared to the compliance market.
“Then, of course there’s the general supply-demand of where carbon credits are simply going to go up in value because they are required.
“You can buy the credit from an aggregator, take it to an exchange, and you can try to make money on the arbitrage there.
There’s going to be voluntary offsets that are going to be priced in the $2 and $3 a ton range to begin with,” he said.
“The key is being able to put carbon credits on the Blockchain, and to be able to relate a high fidelity carbon instrument into the Blockchain.
It’s on the frontier, and it needs a lot of breathing room early to create the right carbon credits for the voluntary market,” he emphasized.
In terms of other investment vehicles for the carbon offset credit market, Kambeitz discussed ETFs.