World Tree is Primed to be a Winner in the Growing Voluntary Carbon Offset Market
What is the Voluntary Carbon Market?
The Voluntary Carbon Market (VCM) is the marketplace for carbon offsets made available to companies, organizations and individuals wishing to voluntarily reduce their carbon footprints, or to go so far as to achieve “net-zero” emissions.
This market differs from compliance (mandatory) markets which are governed by national or regional laws that mandate emission sources to meet predetermined emission reduction targets (for example, the California Cap and Trade system).
The growing demand
The demand for voluntary credits is beginning to grow significantly, driven by the increasing number of corporations making net-zero commitments (ref). The number of companies making this pledge doubled from 500 in 2019, to more than 1,000 in 2020 (ref). In September 2021, The Climate Pledge, an initiative started by Amazon, announced it had over 200 large corporate signatories.
2021 was the biggest year yet for the VCM with a total market valuation of $6.7 billon. VCM demand is expected to grow by a factor of 15 or more by 2030, and by a factor of up to 100 by 2050. By 2050, the market for carbon credits could be worth up the $50 billion worldwide (ref).
Demand for credits from nature-based projects is especially high (ref). These are credits based on the absorption of carbon by forests, wetlands and peatlands. Forestry projects in particular are attractive to many purchasers. They can also yield other important benefits including the protection or improvement of biodiversity, and the creation of local economic and social development in rural areas.
The problem is that most trees take a long time to grow. This is creating supply shortages of nature-based credits which is driving up prices (ref).
How World Tree is positioned to prosper
This is all good news for our World Tree farmers and investors. Our Empress Splendor trees are some of the fastest-growing trees in the world. They can absorb up to 10 times as much carbon as many other trees, including pine.
We have hired a highly qualified Climate, Carbon and Social Impact Program Manager, Thierry Bodson, to build our carbon program around this amazing tree.
Thierry and his team are in the process of developing three carbon offset projects for the VCM in Latin America (Costa Rica, Guatemala and Mexico) with our partner Ostrom Climate. Ostrom is one of North America’s leading providers of carbon management solutions.
Farmers in these regions can opt-in to our new Carbon+ Program and have their trees verified annually, starting at year 3 in the growth cycle.
Any revenue generated from the sale of carbon offsets from the carbon sequestered by their trees will be shared with the farmers.
This will provide World Tree’s participating farmers in Latin America with an additional source of revenue in the years prior to harvesting and sale of the lumber. And it will create much needed financial support to help cover the costs of maintaining and growing the trees.
We will have lots more to report in the months and years to come as our carbon program continues to develop.
Please contact us if you have any comments or questions.