London Stock Exchange develops new market solution for voluntary carbon markets
The London Stock Exchange today announces that it is developing a capital markets solution to enhance investment in carbon mitigation projects worldwide.
The Exchange notes that a growing consensus has developed regarding the need for a global, scalable Voluntary Carbon Market that can deliver a rigorous, market-based approach for investment in activities that reduce and remove global carbon emissions.
LSE comments:
“We believe that we can address two major barriers that currently restrict this market: access to capital at scale for the development of new climate projects worldwide; and primary market access to a long-term supply of high-quality carbon credits for corporates and investors”.
The London Stock Exchange expects to use its existing market infrastructure, supplemented by specific requirements relevant to carbon credit projects. This would enable funds to be listed that will provide capital for projects that reduce greenhouse gas emissions and remove carbon from the atmosphere.
“Our intention is to facilitate the public listing of carbon funds through a disciplined, transparent market with a clear price signal and confidence that investors can directly support the development of high-quality climate change mitigation projects worldwide. We anticipate that corporates and other organisations with long-term needs for carbon credits will become investors, using the carbon credits delivered by these vehicles – which may be issued as an alternative or additional dividend – to meet a portion of their offset needs,” LSE adds.
It is envisaged that the process of generating carbon credits will use the current ecosystem of credible standards and verification bodies that is being strengthened by the efforts of the Taskforce for Scaling Voluntary Carbon Markets and other governance initiatives, supported by industry experts and civil society groups.