Carbon Credit Market Research Articles

Navigating Tax Objectives and the Future of the Carbon Credit Market in the Gulf Cooperation Council Countries

Investments in carbon offset projects have been growing and are expected to continue to grow, and the carbon credit market is key in advancing the green economy. Carbon credits have tax consequences, one of them being value added tax (VAT), hence it is essential to look into the VAT aspects of carbon credits. This article analyses the evolving nature of carbon credits which led to complications from a VAT perspective. Further, the article addresses whether these credits should be classified as electronic services for VAT purposes or otherwise in Saudi Arabia and the United Arab Emirates.

Exploring the transition to agroforestry for smallholder farmers: a feasibility study for the Ashanti region of Ghana

Smallholder farmers in the Ashanti region of Ghana face challenges due to shifts in climate patterns that have a significant negative impact on their crop yields. We conducted a feasibility study into the transition toward an agroforestry system by integrating trees and shrubs within crop fields. In this research, we adopted a complex systems perspective to analyse the institutional, social, and technical aspects that play a role in such a transition. By conducting in-depth analyses through three rounds of interviews and a Q-sort method with smallholder farmers in the Ashanti region, we mapped the most important challenges in transitioning to an agroforestry system. These pertain to: uncertainties in land tenure agreements, the absence of effective conflict resolution mechanisms, having no knowledge of and tools for maintaining trees, and the lack of financial resources for upfront investments. Based on our findings, we provide recommendations for the design of the transition process toward a comprehensive agroforestry system in Ghana. We recommend improving land tenure security and establishing conflict resolution mechanisms by polycentric coordination in which all stakeholders are involved for this essential institutional redesign process. To enable smallholder farmers to acquire the required skills and tools for tree crops, preferably a pilot plot for real-life demonstration is initiated. Financial resources for the smallholder farmers in the transition period need to be warranted, e.g., via the design of a carbon credit market. We recommend future research to explore the perspective and interests of chiefs/landowners in the Ashanti region who have crucial decision-making power through their land ownership.

A blockchain and internet of things-based information infrastructure for the Chinese automotive sector carbon-credit market

In 2021, 12 fraudulent cases were identified in the Chinese carbon market. As a critical component of this emerging market, China’s carbon-credit scheme in the automotive sector faces several shortcomings, including informational opacity and operational inefficiency, which affect market functionality and fairness. This study develops an information system that integrates blockchain technology and the Internet of Things to manage a carbon-credit scheme. Specifically, we attached carbon credits to each vehicle with radio frequency identification electronic tags and a chained data structure to ensure the traceability and reliability of information flow. We use the distributed ledger technology and establish five distinct types of smart contracts for decentralized operations to ensure that all procedures of the Chinese carbon-credit scheme are standardized and under public scrutiny. The proposed infrastructure has the potential to significantly enhance the transparency and efficiency of China’s carbon-credit schemes.

Carbon credit market in the context of environmental and social responsibility of Ukraine

Carbon credit market in the context of environmental and social responsibility of Ukraine

Governance and Challenges in the Carbon Credit Market: a Comparative Analysis of Industrial Waste and Solid Waste in the State of Rio de Janeiro

Objective: The general objective of this study is to analyze the governance and challenges of the carbon credit market, focusing on the comparison between industrial waste and solid waste in Rio de Janeiro. To achieve this objective, the following specific objectives were established: to examine the history and evolution of the carbon credit market; to analyze the global and Brazilian energy scenario and its impact on the greenhouse effect; to investigate the principles of the Clean Development Mechanism (CDM) and its applications; and to evaluate the management of solid and industrial waste in the context of carbon credit. Theoretical Framework: In the early 1980s, the idea of exchanging the national debt of developing countries as a means of preserving natural resources emerged, establishing a model for carbon credits (Albuquerque et al., 2021). Carbon credits are one of the strategies adopted at national and international level to mitigate the increase in greenhouse gas concentrations in the atmosphere. Method: The methodology adopted for this research involves analyzing the governance and challenges of the carbon credit market, with a focus on comparing the management of industrial waste and solid waste in the state of Rio de Janeiro. Comparative analysis is a central part of the study, which examines the differences and similarities in industrial and solid waste management, with the aim of understanding how these practices impact the carbon credit market. Results and Discussion: The results show that the information presented on urban solid waste management in the state of Rio de Janeiro reveals a challenging scenario that requires coordinated action between the state, municipalities and the various sectors of society. The average generation of solid urban waste per capita is 1 kg per day, totaling approximately 6,596,840.90 tons per year in the state (Inea-RJ, 2023). The inadequate disposal of this waste over the decades has caused environmental, social and economic problems. Research Implications: The practical and theoretical implications of this research are discussed, providing insights into how the results can be applied or influence practices in the field of governance in the carbon credit market in the context of solid and industrial waste management in the state of Rio de Janeiro, demonstrates that inadequate waste management has been a challenge, generating environmental impacts and limiting the potential for recovery and reuse of materials. In a scenario where the average generation of urban solid waste per capita is 1 kg per day, totaling approximately 6,596,840.90 tons per year, the implementation of sustainable solutions, such as the creation of a carbon credit market, can offer viable alternatives to mitigate these problems. Originality/Value: This study contributes to the literature as the governance and challenges of the carbon credit market in the context of waste management in Rio de Janeiro reflect the complexity of the interactions between production, consumption and disposal. The implementation of integrated policies and the promotion of sustainable practices are essential to overcome current challenges and create opportunities for economic and environmental development.

Business opportunities for american companies in Brazil: the connection between environmental law and sustainability

This article aims to explore sustainable business opportunities for American companies in Brazil, highlighting the connection between Brazilian environmental law and the global scenario of social and environmental responsibility. Brazil is emerging as an important opportunity for sustainable investments, especially for American companies seeking to align profit and social and environmental responsibility. Furthermore, with a vast wealth of natural resources, the country offers a favorable environment for sustainable development initiatives. The growing global pressure for sustainable business practices, supported by international guidelines and local legislation, highlights Brazil as a strategic destination for sustainable businesses, and the growth of environmental, social and governance (ESG) concerns on the international stage, together with the country's commitment to sustainable development and global agreements such as the Paris Agreement, reinforces the country's attractiveness as an investment destination. Furthermore, compliance with Brazilian environmental legislation, although challenging, can offer significant competitive advantages, including access to tax incentives and credibility with consumers and investors, and opportunities such as the carbon credit market and the implementation of sustainable practices in key sectors position Brazil as a hub for innovation and sustainable growth. By investigating the incentives provided by the country's environmental legislation, we seek to demonstrate how the alignment between economic development and environmental preservation can generate competitive advantages for foreign companies interested in the Brazilian market.

Municipal Waste Treatment: Climate Change Mitigation Impacts and Carbon Credit Market Effects

Objective: Analyze the feasibility of proposing a comprehensive methodology for inventorying greenhouse gas (GHG) emissions from urban waste, with the goal of enhancing the attractiveness of carbon credits and demonstrating their impacts on climate mitigation. Theoretical Framework: The research is grounded in theories related to climate change, the circular economy, and urban waste management. Global warming is discussed through the works of authors such as David Wallace-Wells and José Goldemberg, alongside concepts from the GHG Protocol and Life Cycle Assessment (LCA). Method: The methodology involves a bibliographic review, document analysis, and exploratory research using secondary and qualitative data. Scientific articles and documents from organizations such as the IPCC and EMBRAPA, among other academic sources, were utilized. Results and Discussion: The research emphasizes that proper management of urban waste, aligned with the principles of the circular economy, can substantially reduce GHG emissions. "Zero Waste" projects are analyzed as viable alternatives for mitigating emissions and obtaining carbon credits. The Life Cycle Assessment (LCA) of products is identified as crucial for inventorying emissions across various stages of the life cycle, thereby facilitating the certification process for carbon credits. Research Implications: The proposed methodology can encourage new investments in recycling and waste reuse, as well as support the establishment of waste treatment units that maximize resource recovery and minimize environmental impacts.Originality: This study contributes to the literature by presenting an innovative approach to the management of urban waste and carbon credits, highlighting the importance of LCA in certifying reduced emissions. Originality: This study contributes to the existing literature by introducing an innovative approach to urban waste management and carbon credits, underscoring the importance of LCA in the certification of reduced emissions.

Technical and economic feasibility of hybrid power generation from urban solid waste associated with solar energy, considering the impact of the sale of carbon credits

Technical and economic feasibility of hybrid power generation from urban solid waste associated with solar energy, considering the impact of the sale of carbon credits

Avenues To Reduce Carbon Emission In Cement Fabrication To Acquire Carbon Credit

The cement industry accounts for roughly 8% of global carbon dioxide emission, and for every tonne of cement procured, a ton of carbon dioxide is released into the air. Cement industry is the backbone of global infrastructure development with no sign of slowing down, as such, it provides the most promising testbed for a carbon credit market to start up. Carbon credit functions as a conversion of money as payment to offset carbon dioxide emission, and can be acquired by reducing carbon emission or its greenhouse equivalents. This carbon credit can then be sold on the carbon market which provides financial incentive for companies to reduce their carbon emission. Acquiring carbon credit can be a viable capital gain strategy in developing nations due to their relatively low labor and overhead costs. This study aims to provide avenues to reduce carbon dioxide emission in cement fabrication as a way to acquire carbon credit for capital gain purposes to developing nations worldwide. This study uses literature review with a descriptive qualitative methodology, with data from relevant books and journals of renowned and reputable publishers online as validity. This study identified three promising avenues to reduce carbon dioxide emission in cement fabrication: alternative cement aggregate material fly ash and bottom ash, carbon capture and storage technology, and alternative fuel in cement fabrication. Three avenues provide pathways for players in the cement industry to adopt according to their capabilities in order to effectively reduce their carbon dioxide emission for acquiring carbon credit.

Curbing price fluctuations in cap-and-trade auctions under changing demand expectations

Curbing price fluctuations in cap-and-trade auctions under changing demand expectations

Enhancing emission reductions in South African agriculture: The crucial role of carbon credits in incentivizing climate-smart farming practices

Enhancing emission reductions in South African agriculture: The crucial role of carbon credits in incentivizing climate-smart farming practices

Granular satellite data to assess the potential for nature based solutions at a national scale: a proof of concept with data from Rwanda and Lesotho

ABSTRACT Nature-based Solutions (NbS) form a substantial part of cost-efficient climate change mitigation options. However, public financial flows towards NbS have been limited. Among the factors impeding investments in NbS are challenges in reliable remote project identification and comparison. In this article, we demonstrate a technological solution to these challenges. Using cloud-based satellite data processing and the proliferation of open geospatial data, we developed a methodology to map NbS suitability based on a set of biophysical, pedological, hydrological and climatological criteria. To provide a proof of concept, we identify potential project areas for eight types of NbS in Rwanda and Lesotho. Building on these spatially-explicit NbS suitability data layers (accessible at https://williamouellette.users.earthengine.app/view/ncs-potential), we develop marginal abatement cost curves for projects in Rwanda and Lesotho. We thus provide a proof of concept for remote identification and project comparison. These technological developments can help investors, such as multilateral donors or governments, alleviate additionality concerns that are implied by local project selection. Key Policy Insights Investment in climate change mitigation through Nature-based Solutions (NbS) is limited, in spite of the large, cost-efficient potential for achieving national and global goals. Remote project identification and comparison can help alleviate some of the impediments to international investment in NbS. Such remote identification and comparison of NbS projects is now possible because of breakthroughs in cloud-based satellite data processing technologies and increased availability of geospatial data. We present a proof of concept, establishing marginal abatement cost curves for climate change mitigation through NbS in Rwanda and Lesotho. Coupled with the institutional improvements necessary to create a reliable intergovernmental carbon credit market, these technological developments have the potential to boost international investment in NbS.

Brazil’s Economic Potential with Carbon Credits: A Study of the “Mata Do Buraquinho” – Brazil

Introduction: Public (state) concern about the climate has, in turn, catalyzed the creation between global governments and transnational companies, and these models are subject to risk-consequence type measures, the conduct of which is now known as the voluntary carbon credit market. The article in question deals with one of the most talked-about economic instruments for combating global warming in international politics, the carbon credit market. Objective: The article in question proposes a reflection on this subject, which has been so much talked about in recent years, focusing on its economic perspective and using a case study methodology to support its results. Theoretical framework: The mitigation of greenhouse gas (GHG) emissions is a necessary condition to lead to a low-carbon economy, and the best way to achieve this is through the application of economic instruments. Such as putting a price on carbon, making this transition quicker and less costly from a social point of view. In this way, with a higher relative price for pollution, private agents will choose between paying for or reducing pollution, comparing the marginal cost of control with the price of carbon. Methodology: Initially, a bibliographical review was made of the economic theoretical framework that underpins one of the instruments considered most efficient in combating climate change, the carbon credit market. In another part of this work, a practical application of this mechanism was carried out, using an evaluation methodology for an application of this instrument in the municipality of João Pessoa -PB, which stands out for being one of the most wooded cities in Brazil and for having some conservation units in its territory, such as the one used in the work, the Mata do Buraquinho Wildlife Reserve. Results: The sale of the ecosystem services that the forest offers, in this case its capacity to absorb CO2, could improve the conditions for maintaining the area and perhaps attract more people to visit it. Thus, the value found for “Mata do Buraquinho” was R$61,968.26.

Synergizing AI and Blockchain: Innovations in Decentralized Carbon Markets for Emission Reduction through Intelligent Carbon Credit Trading

This study aims to enhance the paradigm of decentralized carbon markets by proposing an innovative integration of artificial intelligence (AI) and blockchain technology for intelligent carbon credit trading with the goal of attaining sustainable emission reduction. Blockchain systems powered by artificial intelligence (AI) have the potential to boost the effectiveness of current systems and expedite the global implementation of emissions trading. Although still in its infancy, blockchain artificial intelligence (AI) presents a promising solution to some of the world's most pressing environmental issues. Environmental sustainability is greatly affected by artificial intelligence because of its decentralized computation architecture. The Artificial Intelligence and blockchain are outstanding direction for today’s environmental issues starting from carbon footprint emission to earth market unstable management, whereby the AI facilitates the best possible operational control of power systems and the blockchain offers decentralized trading platforms for the energy markets. The paper's theoretical framework, based on advanced mathematical models, serves as the foundation for this study, in which AI algorithms are methodically constructed to anticipate carbon emissions with unprecedented accuracy. Using sophisticated coding simulations and complicated mathematical formulas, the study boldly transitions into a realistic digital implementation that builds on this theoretical foundation. This complex experiment not only validates the theoretical ideas but also illustrates the complex relationship between blockchain and AI in the decentralized carbon market ecosystem. This experiment's mathematical basis is the creation of an integrated pricing model that seamlessly blends blockchain-based trading dynamics with AI-driven forecasts. The model incorporates a dynamic, self-adjusting system that responds to current market conditions, in addition to optimizing the pricing calculation of carbon credits. Complex market dynamics, player tactics, and the overall equilibrium of the carbon credit market are all modeled by mathematical simulations. The project goes deeper into building blockchain-based smart contracts, which enable safe and transparent transactions. The comprehensive mathematical results of the experiment shed light on the best way to price carbon credits while underscoring the disruptive potential of blockchain and artificial intelligence in terms of sustainable emission reduction strategies used in carbon markets. Major conclusions about the potential advantages of Blockchain AI for guaranteeing emissions reduction are drawn from the current study. Additionally, it presents a roadmap for future research in this area.

Techno-economics and environmental sustainability of agricultural biomass-based energy potential

Techno-economics and environmental sustainability of agricultural biomass-based energy potential

Crédito de Carbono e Macaúba: Avançando ESG na Produção de Gado Verde

ABSTRACT This case aims to explore the intersection between the financial sustainability of cattle production, the sale of carbon credits, and the cultivation of macaúba palm trees. The case identifies challenges and opportunities for ESG (environmental, social, and governance) practices in the context of contemporary agribusiness. The account involves a Brazilian rural farmer and presents the planting process and integration of macaúba palm with beef cattle production, the concept of the carbon market, and the social externalities of the project. The case raises the following dilemma: How to balance the economic potential of macaúba palm trees and their byproducts with the mission of producing cattle in an ecologically responsible manner while positioning favorably in the carbon credit market? The pedagogical objectives focus on analyzing the economic, financial, and environmental feasibility of integrating green cattle production and macaúba palm cultivation, understanding the dynamics and implications of carbon credits in the national agribusiness context, and reflecting on the importance and challenges of implementing ESG practices in agribusiness, this way stimulating the decision-making capacity in complex and multidimensional scenarios. The case can be applied in undergraduate and graduate level courses in finance and related fields. The case is recommended to encourage students to reflect on the financial structures and challenges of implementing the sale of carbon credits for small rural landowners.

Углеродные кредиты в стратегиях декарбонизации нефтегазовых компаний

Carbon credits are an increasingly important tool for decarbonization. They are of particular importance to oil and gas and other energy companies for which burning fuel comprise the core of the business. The two main sources behind carbon credit emission are renewable energy projects and projects to sequester greenhouse gas emissions from natural systems, mainly forests. Without offsetting mechanisms, including nature-based solutions, companies with high carbon footprint are fundamentally unable to achieve net carbon neutrality. Despite challenges, the voluntary carbon credits markets continue to grow. In 2020–2022 the world’s 34 largest companies by capitalization bought certificates equal to 38 million tons of carbon emissions, which is equivalent to the combined greenhouse gas emissions of Ethiopia and Kenya. 50% of these credits were purchased by oil and gas companies and 28% by automobile concerns. In the near future, voluntary carbon markets will continue develop in an imperfect mode of trial and error, which is inherent to all markets at their early stages of development. The author shares the view that a large-scale non-ideal credit/offset market will be more conducive to solving the strategic task of decarbonizing economic growth than an ideally organized but small-scale market. In principle, this position is supported by authoritative regulators, whose policy is critical for the development of a new market. In May 2024, key economic departments of the US government, including the Department of Agriculture, the Department of Energy and, most importantly, the Department of the Treasury, unequivocally supported the development of a carbon credit market that promotes decarbonization, opens up new opportunities for investment in climate projects and enables realization of wide externalities that positively influence economic growth and preservation of biodiversity.

Transnational Climate Justice and the Carbon Credit Market

Transnational Climate Justice and the Carbon Credit Market

The Empirical Analysis of the Effects of the COVID-19 Pandemic Crisis on the South Korea and Europe Carbon Market

This study examines the impact of the COVID-19 pandemic on carbon credit prices in South Korea and Europe, aiming to analyze the implications for the South Korea and Europe carbon markets. The empirical analysis was based on the data of the Korean carbon credit and European carbon markets, which accounts for more than 80% of the global carbon credit market. The study is based on the daily Korean Allowance Unit (KAU) data from January 2015, when the Emissions Trading System (ETS) was first implemented, to December 2022, when the restrictions eased. For Europe, this study employed the European Union allowance (EUA) market data for the same period, using the EUA futures data, which expires in December every year and exhibit considerably higher liquidity than the EUA spot price. The results indicated that no significant Granger causality between the Volatility Index (VIX), EUA, and KAU during 2015 to 2019, before COVID-19 was identified. However, for 2020 to 2022 (the COVID-19 outbreak period), the null hypothesis of no Granger causality between the VIX and EUA at the 5% confidence level was rejected. These findings suggests that the economic crises and the consequent changes in the demand and supply of carbon emissions can affect the carbon credit price.

CARBON CREDIT MARKET IN THE MOBILITY SECTOR: OPPORTUNITIES IN THE BRAZILIAN CONTEXT

The transportation sector is one of the largest emitters of greenhouse gases, contributing to climate change. Numerous initiatives have been adopted worldwide to reduce the emission of these gases, including the carbon credit market. The objective of this study was to review and contextualize mobility and pathways for transitioning to a low-carbon economy. The research was conducted using national and international databases and organizations related to the carbon credit market. Studies, reports, and documents were selected based on the following criteria: Materials related to mobility, sustainability, and carbon credit themes; in English, Portuguese, or French up until November 2022. The analysis of the information identified that life cycle analysis calculation methodologies are predominantly focused on nature, with little published about the transportation sector. Companies still need to incorporate environmental performance management through greenhouse gas emission inventories and evolve towards life cycle analysis of their products and services. In the global scenario, road vehicles account for 77% of the global carbon emissions from transportation (34% being heavy vehicles). Heavy vehicles disproportionately contribute more to the warming potential due to particle emissions. In conclusion, there is no single solution for the decarbonization of the transportation sector in Brazil; a combination of fleet renewal, biofuels, and improvements in the efficiency of the existing fleet, such as the electrification of the second axle of heavy vehicles, are essential to achieve Brazilian goals.