Axios Pro: Climate Deals

January 04, 2023

Axios Pro Exclusive Content

🐪 And just like that, it's already Wednesday. Let's get to it.

1 big thing: Huge demand for carbon trading

Data: PitchBook; Chart: Axios Visuals

Investors last year heaped piles of cash into carbon trading marketplaces and accounting providers — a huge surge from prior years, Alan reports.

Why it matters: The hand-wringing over whether carbon offsets can work hasn’t kept investors’ hands in their pockets.

What’s happening: PitchBook data shows that deal value in the decarbonization space jumped past $1 billion, a more than 10-fold increase from 2020.

Driving the news: ESG demand drove the surge.

  • Investors and consumers are pushing companies to mitigate their carbon footprints. Buying an offset is cheaper, faster and easier than integrating renewables or switching to low-carbon fuels — especially amid ongoing supply chain disruptions.
  • Marketplaces can meanwhile provide a level of standardization — or perceived standardization — that’s long been missing from trading regimes.

What we’re watching: The feds, led by the SEC, are preparing rules that could bring new oversight to carbon offsets.

  • Last year was a gold-rush. This year, we’ll see whether any of the services emerges as the go-to marketplace or accounting provider.

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