Forecasting Model
Forecasting Prices, Supply & Demand in the Voluntary Carbon Market
Our new forecast report leverages years of data and analysis to present critical future trends for the voluntary carbon market. In this report we cover scenario modeling, regional and sectorial insights, model applications (including forecasting employment in the VCM) and an overview of the model assumptions.
Here are some of the key findings from our Base Case Scenario:
- The base case below projects a growth scenario that sees companies offsetting a portion of their missed targets. Here we expect the market to grow slowly until 2032, as oversupply of credits means that there is enough supply to satisfy demand until that year.
- The primary market value stays in the single digits until 2033, at which point it quickly increases, reaching ~$40b by 2040 (in nominal terms).
- The number of credit retirements reaches 1b in 2039.
- In the next 5 years, we forecast energy efficiency and waste disposal projects to become more popular.
Forecast Model Use Cases
Create more accurate revenue projections by inputting the forecasted price (at a sector-country level)
- Present compelling pitch to potential investors
- Identify profitability of projects in specific countries and sectors to understand top investment candidates
- Negotiate fair price for projects in off take purchase agreements
- Find untapped potential for carbon market activity across sectors and geographies.
- Adjust your portfolio to meet future demand.
Understand the likely future drivers of demand, at a sector level.
Tap into AlliedOffsets data on corporate emissions and decarbonization targets in order to identify interested buyers of credits and evaluate their likely need for credits in the future.
Identify countries with high VCM potential and begin building relationships with key policymakers.
- Identify potential for VCM-driven job creation, and likely impact on the economy.
- Help policymakers draft sensible regulation and revenue-raising strategies for carbon projects.
- Examine how VCM activity can help countries meet conditional and unconditional NDC goals.
- Better understand the Article 6 landscape for countries’ projects.