Virtus: Putting a Carbon Price on What We Cannot Afford to Lose
Welcome to the July edition of the Virtus newsletter!
This month, we’re asking why carbon pricing, decades after its first pilot markets, remains the linchpin for pricing in climate risk at scale.
In Our Take, we hand the pen to a guest voice: Paula DiPerna, strategic environmental advisor and carbon markets pioneer. She traces the origin story of carbon pricing – from a phone call to herself in Beijing to the founding of the world’s first cap-and-trade markets – and makes the case for why a credible global carbon price remains our best shot at confronting climate change at scale.
In Untangling Climate Finance, Jimena Caballero, Senior Associate at Gordian Knot Strategies, steps out from behind the scenes to talk with Jay about her path from lab bench to climate finance, how TRARO (GKS’s seven-element investment screening tool) works, and much more.
In What We’re Absorbing, we dig into two reports from Öko-Institut – the EU’s next move on emissions trading and a blueprint for using international carbon credits toward the 2040 climate target – plus ClearBlue’s full-quarter read on global carbon markets.
And in Climate Finance Deals, the EU proposes a €50 billion ETS carbon removal compliance market, the UK backs $400 million in AfDB funding for South Africa’s energy transition, Scandi Standard secures a €450 million sustainability-linked loan, and IFC anchors Jordan Kuwait Bank’s second green bond.
Happy reading!
Gordian Knot Strategies
We are Igniting Climate Solutions: Mobilizing $1 Billion Per Year in Impact Investment by 2030!
For the second year running, Gordian Knot Strategies has been named a finalist for the Responsible Business Leadership Award as part of the RestorLife Awards, presented by Restor and the G20 Global Land Initiative!
The award recognizes businesses that have moved sustainability commitments into practice, with proven, scalable impact on nature. Being named among this year’s finalists reflects the consistency of our work across climate finance, impact investing, natural capital, and carbon markets, and reaffirms our commitment to the integrity standards this sector needs.
We’re proud to stand alongside this year’s cohort of finalists! You can read the full finalist announcement here.
Written by: Paula DiPerna
This month, we’re handing “Our Take” over to a guest voice — and a special one. Paula DiPerna is a strategic environmental and philanthropic policy advisor, author, and pioneer of carbon markets. She helped found the Chicago Climate Exchange and China’s first carbon market, the Tianjin Climate Exchange, and now serves as Special Advisor to CDP. In this piece, Paula traces the origin story of carbon pricing — from a phone call to herself in Beijing to the world’s first cap-and-trade markets — and makes the case for why a credible global carbon price remains our best shot at pricing in climate risk at scale.
Paula joined Jay on Untangling Climate Finance back in Season 1 (2023) to talk carbon markets and her book, Pricing the Priceless. Well worth a listen:
My phone was ringing. I was in a car in Beijing, hoping to catch a breath between meetings even though I knew no rest was possible in China. Just one more call I told myself. No answer. Ring, ring. Odd, thought I. In China, people almost always answer their phones. Then I realized. The left pocket on my jacket was vibrating–I had called myself! There I was, so busy and deep into my work I needed two mobile phones, yet so crazed and tired, I had used one of them to call the other. I would have fallen over laughing at myself if I had not been sitting down!
What was this exhilarating yet exhausting endeavor?
I was with renowned economist and financial innovator Dr. Richard L. Sandor, widely recognized as the “father of financial futures,” and we were wrapped up in achieving a dream—setting up the first carbon market in China! Sandor was also Founder and Chairman of the Chicago Climate Exchange (CCX), another dream, and the first cap-and-trade in the world addressing climate change, opened for trading in 2003. In my role as President of the Joyce Foundation, I had helped trigger the creation of CCX and now, in China and having left the Foundation and Chicago after the 9/11 attacks to return to my home in New York, I was President of CCX-International.
We did eventually open China’s first pilot carbon market in 2008, the Tianjin Climate Exchange (TCX), a joint venture with the China National Petroleum Corporation (CNPC) and the city of Tianjin, then establishing itself as a new financial hub hoping to rival Shanghai.
Opening TCX had taken months of negotiations, dinners, lunches, back and forth trips in and out and around China, painstakingly building support among industrial companies and public officials. There was indeed no rest, for as soon as we thought we had settled one contract or planning detail, another surfaced. Some of this was the then-standard labyrinthine process of doing business in China, but most of it was because we were truly breaking new ground. Not only was one of the largest oil companies in the world taking the lead on using cap-and-trade to manage greenhouse gas emissions by hooking up with a US company, but the joint venture structure also itself was unprecedented—to our knowledge, CCX and its parent company, Climate Exchange plc, was the first foreign enterprise to own shares in a Chinese financial institution.
So, what was this dreamland, from Chicago to China and beyond? The beginning of credible carbon markets worldwide.
To read the rest of this article click here.
Client Served in the United States:
A leading carbon market registry focused on urban forest preservation and planting engaged us to develop a strategic market and commercialization roadmap for its portfolio of high-integrity credits in the United States. During the engagement, we worked closely with the client team to review existing sales assets and channels, segment and prioritize prospective buyers, and refine core value propositions for corporate and institutional demand. The work included designing a structured three-phase approach to strengthen credit sales strategy, explore pathways for integration by other major carbon standards, and equip partner organizations to act as local project and demand catalysts. The resulting strategy positioned the client to advance a more bankable offering for urban forest carbon, expand outreach through dedicated partners, and pursue larger, longer-term offtake opportunities aligned with its mission to scale community-based climate and nature outcomes in American cities.
“The engagement with Gordian Knot Strategies was professional, well organized and incredibly valuable. The knowledge we gained during the engagement moved us leaps ahead of where we were prior to the engagement. We feel significantly more prepared to move our project forward and will be trying to find a way to remain engaged with GKS as we move forward.”
Jim Snyder — Chief Financial Officer, Savory Institute
🎙️ In this episode, Jimena Caballero, Senior Associate at Gordian Knot Strategies, shares how TRARO, GKS’s seven-element investment screening tool, brings structure to a notoriously messy impact investment space, walks us through her work supporting City Forest Credits and screening carbon credit portfolios for a major U.S. airline, and shares what it was like leading GKS’s first-ever sustainability report. Jimena also opens up about her path from a Biology and Chemistry degree to her work in climate finance. She also makes the case for why pushing at every level, starting local, is the a strong way forward on climate change.
Click any of the links below to listen!
This month, we’re absorbing two reports from Öko-Institut – the EU’s next move on emissions trading and a blueprint for using international carbon credits toward the 2040 climate target – plus ClearBlue’s full-quarter read on global carbon markets. Click the titles for links.
✍️ Assessing the 2026 Commission Proposal for the EU ETS 1 – Öko-Institut
This policy brief examines the implications of the amendments for the EU ETS proposed by the EU Commission in July 2026, assessing the supply and demand balance, with particular attention to the revised cap trajectory, additional sources of allowance supply, and the amended Market Stability Reserve rules, and considering implications for free allocation, permanent carbon removals, and international credits within the EU’s 2040 and 2050 climate objectives.
✍️ Using International Carbon Credits towards the EU 2040 Climate Target — Öko-Institut
This brief lays out how the EU could deploy Article 6 international carbon credits toward its 2040 target, drawing on lessons from the CDM/JI era and the voluntary carbon market. Key calls: treat credits mainly as a safety reserve, route purchases through a central EU buying facility rather than letting individual ETS entities buy directly, use the Paris Agreement Crediting Mechanism as the integrity floor with added EU safeguards, strip project developers of the power to pick and pay their own auditors, and don’t count these purchases as climate finance since they’re transactional, not aid.
✍️ State of the Global Carbon Markets: Q2 2026 – ClearBlue Markets
ClearBlue’s quarterly rundown of compliance and voluntary markets worldwide: RGGI spiked over 50% on power demand, California’s CCA rebounded on new rules, EU Allowances dropped 11% before recovering into a summer policy review, and VCM retirements jumped 25.4% year-over-year – powered by a 135% surge in forestry credits. Chinese and South Korean carbon prices hit new highs, while clean fuel credits also moved up sharply.
This month’s climate finance deals (and proposals) highlight momentum in compliance carbon removals, just energy transition infrastructure, and sustainability‑linked corporate refinancing. Click the article title for the link.
EU Proposes Historic €50B ETS Carbon Removal Compliance Market
The EU is advancing a dedicated ETS carbon removals window that auctions additional allowances and uses the proceeds to procure high‑durability BioCCS and DACCS removals, initially limited to EU‑based projects under new certification rules. The mechanism is expected to mobilize on the order of €50 billion between 2031 and 2040, creating a sizeable, policy‑driven demand signal for long‑term carbon removal solutions.
The UK is guaranteeing a $400m, results‑based AfDB loan aimed at upgrading electricity and water services in South Africa’s Mpumalanga Province, with funds released only once service improvements are independently verified. By embedding performance‑linked disbursement and aligning with the Just Energy Transition Partnership, the programme is positioned as a replicable model for municipal utility reform and climate‑resilient infrastructure.
Scandi Standard Secures New EUR 450m Sustainability-Linked Loan To Fund Growth
Nordic poultry producer Scandi Standard has agreed a new five‑year €450m sustainability‑linked syndicated facility with four relationship banks, combining a term loan and revolving credit to refinance existing debt and support growth initiatives. Loan margins are tied to the company meeting defined sustainability KPIs, reinforcing integration of ESG performance into its capital structure and signalling lender confidence in its transition strategy.
IFC Backs Jordan Kuwait Bank’s Second Green Bond With Up To $100M
IFC will invest up to $100m in Jordan Kuwait Bank’s second green bond, with proceeds earmarked for renewable energy, energy efficiency and other climate‑aligned assets in Jordan. The anchor commitment is designed to attract additional investors, broaden the bank’s green portfolio, and strengthen the domestic market for labelled bonds supporting the country’s decarbonisation and sustainability goals.
At Gordian Knot Strategies, our goal is to help mobilize $1 billion per year in climate finance. That is why we’re committed to making climate finance smarter and faster by addressing a broken impact investing screening process.
That’s why we built TRARO®, a predictive analytics platform designed to help investors rapidly triage opportunities with clarity, consistency, and confidence.
Have a climate project? Submit it to TRARO® for a free screening and based on assessment outcomes, we can match you with interested impact investors. You can also explore real-world case studies to see how TRARO® supports smarter investment decisions, and you can find more information and how to create an account on TRARO® here.
Are you an impact investor or funder? Get in touch with the TRARO® team at traro@gordianknotstrategies.com to access scorecards from high scoring projects, or run targeted RFPs through TRARO® to streamline your process, save time, and reduce review costs.
We are building a global database of impact investors to help mobilize $1 billion annually in climate finance by 2030. If your organization is interested in providing funding for climate or environmental projects, we invite you to fill out our Impact Investor Information Form. Your contact details will remain confidential, and we’ll only connect you with aligned opportunities. There is no fee to participate.
To access the form click here.
Interested in connecting with us on climate finance, impact investment, climate solutions strategy, or carbon credit development and commercialization?
To discuss how we can support your goals, book a 30-minute conversation with Gordian Knot Strategies here.
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