The emerging carbon-market intelligence sector
Mark Maslin and Martyn Poessinouw chart rapid growth of carbon-based credit markets
The carbon-market intelligence (CMI) sector has been growing even faster than forecast in recent years. New research, published online in Nature Climate Change on 22 April by Professors Mark Maslin (UCL Geography and UCL Environment Institute) and Martyn Poessinouw (UCL Environment Institute and Knowledge Matrix Limited), shows that in 2010-2011 it was worth over £35 billion.
The CMI sector provides information in 15 sub-markets identified by the authors, including monitoring, carbon footprinting and legal compliance, to support organisations selling or purchasing local, national and regional carbon-based credits. The high growth rate is expected to continue. Compared with 15.7% growth in 2010-2011, the authors conclude that, “Annual growth increases every year in our predictions ending up as 18.7% in 2015-2016. To put this in context, over the same period we would expect annual global growth in gross domestic product (GDP) to be 1-2%”.
Why is there such a high growth in CMI activities compared with much lower reported growth in carbon trading itself? The authors suggest that it may reflect (1) preparation for an expected new wave of carbon trading, (2) a more cautious or regulated approach adopted in carbon trading, (3) the accumulating costs of existing and new trades or (4) the growth of carbon-accounting activities rather than trading itself. They anticipate that, as new ways are developed to interpret CMI source data, the economic and policy drivers for the growth should become clearer.