​About the Carbon Market
​INTRODUCTION
Global Carbon Credit Exchange (gCCEx) is set to launch a unique platform that will play a major role in the carbon market.
Global Carbon Credit Exchange (gCCEx) is set to launch a unique platform that will play a major role in the carbon market. With the increase of extreme weather due to the emission of Greenhouse Gases, the global community, lead by the United Nations (UN), is taking action to save the future of humankind.
• Governments are enacting regulations that cap companies’ carbon emissions
and penalize companies that exceed their cap, unless they acquire carbon
credits to offset their excess admissions.
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• Carbon emitting companies around the world are participating in the voluntary
carbon market to demonstrate social responsibility and establish a green
corporate image with “zero emission” status.
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• Organizations around the world are establishing GHG emission reduction
projects to benefit the planet and establish marketable (verified) carbon credits
for sale in the voluntary carbon market.
Whether companies desire to acquire carbon credits to comply with regulations or
establish good will, gCCEx provides an innovative and highly efficient electronic carbon
credit exchange marketplace for the listing and trading of regulatory and verified carbon
credits.
• 1994 - The United Nations Framework Convention on Climate Change (UNFCCC) - Initiated a global
effort to combat climate change.
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• 1997 - Kyoto Protocol - Signatory countries agreed to set reduction targets. Target is allocated and divided
into Assigned Amount United (AAU) that may be traded between countries. A new commodity was created in
the form of an AAU, and the concepts of a carbon credit and the “Carbon Market” were born.
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• 2015 - Paris Agreement - Sets out a global framework to avoid dangerous climate change by limiting global
warming to well below 2°C. Most countries adopted a “cap-and-trade” regulatory system to limit the carbon
emissions of covered entities. The foundation for modern carbon credit trading was laid.
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• 2019 - UNFCCC-COP25 - Included the 15th session of the Kyoto Protocol and 2nd session of the Paris
Agreement. Negotiations continued regarding the operation of the “cap and trade” carbon markets and
trading of carbon credits.
HOW IT ALL STARTED
​CAP AND TRADE
• The “cap” is a limit on the amount of carbon emissions a company may emit into the atmosphere.
• A “Cap and Trade Carbon Credit” is created when a company emits less carbon dioxide than it is permitted to emit under its cap.
• A “trade” occurs when a company that has emitted more carbon emissions than permitted under its cap acquires another company’s Cap and Trade
Carbon Credits.
• Some companies pay to emit more than their cap while other companies emit less and sell their Carbon Credits.
• There is currently no dedicated Cap and Trade marketplace comparable to a national stock exchange.
VOLUNTARY CARBON CREDITS
1 Carbon Credit = Right to Emit 1 Ton of CO2
In short, Voluntary Carbon Credits (VCC) are generated
when a independent auditor:
1. Evaluates an organization’s carbon emissions reduction
project;
2.Quantifies the project’s reduction of carbon emissions in
tonnage; and
3.Registers the equivalent of one Verified Carbon Credit for
every ton of carbon dioxide reduced.
There is currently no dedicated VCC marketplace comparable To a national stock exchange.
MARKET ORGANIZATION
According to the World Bank, there are 58 carbon pricing initiatives spanning 46 nations and covering 20.1% of total global GHG emissions.
These initiatives are principally composed of the following:
• Carbon Tax
• Emission Trading Systems (ETS) (i.e. - Cap and Trade)
• Offset Mechanisms (i.e. - Voluntary Carbon Market Carbon Credits)
Some ETS allow the use of carbon credits from Offset Mechanisms as flexibility for compliance. Multiple Standards for Offset Mechanisms: Clean Development Mechanism (CDM); Gold Standard (GS); Voluntary Carbon Standard (VCS); Voluntary Emission Reduction (VER+); The Voluntary Offset Standard (VOS); Chicago Climate Exchange(CCX); etc.
The market is still in its infancy and has plenty of room to grow, with 79.9% of GHG emissions that
still need to be reduced to reach net-zero carbon emissions.
With increased demand as the market grows, carbon credits should trade at $50-100 USD per ton of
CO2 by 2030, a significant increase over the current average of $10-20 USD.
The International Monetary Fund found that the implicit global subsidy from undercharging for energy and its environmental costs in 2017 was a staggering $5.2 trillion, or 6.5 percent of world GDP.
Global carbon markets grew by 34% in 2019 to $215.1 billion USD, according to analysts at Refinitiv, marking a third straight year of growth and a nearly fivefold increase in two years. Growth is expected to continue.
To reduce the implicit global subsidy to $0.00, the global carbon market will need to grow by $5.0 trillion USD over the coming years.
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Obstacle to Growth: There is a lack of organization and interoperability amongst government programs and voluntary market standards, and a dedicated venue that aggregates all carbon credits for trading.
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Proposed Solution: Introduction of a centralized carbon credit depository that aggregates and standardizes the numerous carbon credit standards for listing and seamless trading on a highly efficient, transparent and secure blockchain technology based exchange with capabilities equivalent to national securities exchanges.
Here comes Global Carbon Credit Exchange (gCCEx), to develop and launch the first comprehensive carbon credit exchange that will facilitate the listing and trading of Carbon Credits certified and registered by our strategic partners.
