Sliced: 2024 Predictions

Listen to this essay on any of the streaming platforms below.

At the conclusion of 2023, we unveiled our IMPACT framework. IMPACT is an acronym we employ to capture the central elements shaping the pace and trajectory of climate finance, carbon markets, and impact investing. We created it to guide our assessment of these spaces. We put it to use in our review of 2023, which can be found here. 

Integrity, Momentum, Prices, Achievement, Collaboration, and Targets.

2023 presented a landscape marked by both challenges and advancements in climate finance and carbon markets. Nonetheless, our prevailing sentiment within the industry is one of cautious optimism. It finally feels like a collective commitment to mitigating the negative effects of climate change is gaining mainstream focus.

Looking ahead, we reaffirm our dedication to fighting the climate crisis by supporting our clients in achieving their objectives. Using the IMPACT framework, we anticipate the follow developments in carbon markets for 2024.

—

I = INTEGRITY

Continuing the trend from 2023, “integrity” will once again be the word of the year. We will see further efforts to advance carbon credit integrity through initiatives that include the ICVCM, VCMI, carbon standards, and corporate partnerships. This focus will undoubtedly lead to improved integrity in the carbon market.

M = MOMENTUM

We will continue to see the momentum building to price carbon on a global basis under an array of mechanisms. This will include carbon taxes, regulated and voluntary carbon markets, Carbon Border Adjustment Mechanisms (CBAMs), and supply chain carbon accounting. The groundswell to put a price on carbon will surface more of these initiatives in 2024.

P = PRICES

The attention given to enhancing the integrity of carbon credits will contribute to increasing carbon credit prices. After the past year of depressed prices, premium pricing will follow the release of CCP-tagged (Core Carbon Principles) credits in the market that ICVCM’s Assessment Framework has assessed.

A = ACHIEVEMENT

COP29 in Azerbaijan will see a resolution on Article 6.2 of the Paris Agreement relating to clarifying cooperative implementation and monitoring the transfers of ITMOs (internationally transferred mitigation outcomes) that will boost ambition and promote sustainable development.

C = COLLABORATION

Major 2024 elections in countries such as the USA, Mexico, Indonesia, and India pose the threat of severely disrupting climate collaboration.

T = TARGETS

Regarding corporations, we will continue to read about more corporate climate target commitments (such as reaching net zero) but unfortunately witness less tangible target achievement.

Regarding countries, at the recent COP28 in Dubai, the first Global Stocktake concluded that “urgent action and support are needed to ramp up implementation of domestic mitigation measures by realizing opportunities across all sectors and systems.” The next series of NDCs (Nationally Determined Contributions) are due to be submitted by 2025. If the pace of deliberations to date is any indication, we don’t expect too much progress this year on preparing the new NDCs crucial for expediting necessary climate action.

Want to receive the Sliced weekly dispatch?

Click here.

If you want to see more of our content, check out our monthly newsletter, Virtus.

Click here.