Do carbon credit ratings help or harm the growth of carbon markets? How important is standardization to liquidity? Should we look to lessons from the bond market? Equities? Commodities? Derivatives? Precious metals? Real estate?! Get ready to go full high finance \u2014 it\u2019s a show about market structure.
\nIn this episode, Reversing Climate Change\u2019s host and Nori Co-founder Ross Kenyon is joined by Tommy Ricketts, CEO and Co-founder of BeZero Carbon, a carbon credit ratings agency, and Matt Trudeau, the CEO of Nori, for a friendly debate about how the industry rates and prices carbon credits.
\nWhat do you do with heterogeneous credits? And what is the overall price of carbon \u2014 what is the price-setting instrument? Should or could there be an idealized financial instrument that represents a tonne of perfect carbon removal? What does this unlock? What might it obscure?
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The discussion revolves around the vital role of project-level quality in the carbon market and the significance of a risk-based approach. Tommy sheds light on the creation of BeZero Carbon and its mission to distinguish the quality of carbon credits. The conversation underscores the potential growth constraints of striving for perfection in carbon markets. The trio explore the evolving landscape of carbon credit markets, the possibility of governmental intervention, and the role of private capital in fueling climate-positive projects.
Tune in to tickle the market structure nerd in your heart you didn\u2019t know existed.
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\n\n\nResources
\n\n\n\n\nMatt\u2019s response, \u201cCommodities markets and the financialization of carbon\u201d
\nMatt writing on buffer pools for VCM
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