Guy Turner, one of the authors of MSCI’s report, notes, “As carbon markets gain popularity, more organisations become carbon-curious, potentially causing a snowball effect as more companies get involved.”
What are the long-term prospects for the carbon market?
By 2050, MSCI predicts that engineered solutions such as DAC could play significant roles, with removal credits possibly comprising two-thirds of the market’s value. Although these technologies are currently expensive and not widely used, they could become substantial contributors to market value.
The anticipated growth appears ambitious, yet the financial ramifications for corporations are expected to be manageable. With the carbon credit market potentially accounting for less than 1.5% of global corporate profits by 2050, this suggests companies could incorporate these costs into broader sustainability strategies effectively.
“Carbon markets can play a hugely important role in tackling climate change,” Guy explains. “They allow governments and corporates to reduce emissions at a lower cost, achieving more effective emission reductions.”
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