Asian hedge fund, Tribeca Investment Partners, with assets under management of US$3.2bn, has bought around US$100m worth of carbon credits.
The fund expects demand for credits and thus pricing to rise substantially. Tribeca is focusing on carbon credits that can qualify for programmes such as Australian Carbon Credit Units or the UN’s REDD+ framework. Tribeca expects REDD+ carbon prices to exceed US$100/t in the next couple of years. This compares with the current average of c.US$8-10/t for high-quality projects.
McKinsey anticipates the voluntary carbon market could be worth US$50bn by 2030, while Mark Carney estimates a 2030 market size of US$100bn. Questions continue to be raised in relation to the effectiveness of carbon offsets in reducing emissions. Calls have been made to ensure reliability of credits and confidence in the market.
Adapted from an article in Bloomberg Green