A small stock exchange in Toronto has become a global hub for companies trading in voluntary carbon offsets and more growth is expected, raising concerns about the effectiveness of the new investments for fighting climate change.
The Cboe Canada exchange has become the “most public venue” in North America for companies selling voluntary carbon offsets to list their shares and raise capital, said a senior executive.
“I have not seen any other exchanges pushing that agenda [of voluntary carbon offsets] the same way we have,” said Erik Sloane, chief revenue officer for the Cboe Canada exchang. “We are certainly the most public and transparent about it at this stage.”
The exchange lists the shares of about half a dozen voluntary carbon offset trading firms, said Sloane, who figures that “could easily double” in the next 18 months, as investor interest in the emerging sector grows.
However, many environmentalists aren’t convinced the buying and selling of voluntary offsets will do much to reduce climate change. Some argue growth in the sector could make the problem worse.
“Using offsets is likely detrimental for reducing climate change, as they help prevent meaningful government action,” said Stefan Pauer, a former European Commission official.
Companies investing in voluntary carbon offsets say the tool is one of many for combating climate change, and putting a price on pollution can help address the problem while funnelling more money to conservation projects.
The investment bank Morgan Stanley expects the global markek for voluntary carbon offsets will surge from $2 billion US in 2020 to more than $250 billion US by 2050.
Voluntary carbon offsets are supposed to represent emissions of climate changing carbon dioxide that have been removed from the atmosphere by projects such as tree planting or preserving rainforests.
Companies or individuals can buy these voluntary offsets to compensate for their own pollution. For example, if someone wants to make up for the climate changing carbon dioxide released by flying to Europe, they can purchase voluntary offsets.
Part of the appeal of Toronto as a location for upstart carbon trading firms stems from the large number of mining and energy companies listed on exchanges in the city, as well as proximity to U.S. investors, said Sloane.
One of the largest offset companies trading on the Cboe exchange is Carbon Streaming Corporation, said Sloane. The company invests in 22 voluntary offset projects around the globe, out of an estimated total of 6,000 across the whole industry.
https://www.cbc.ca/news/business/voluntary-carbon-offset-firms-toronto-exchange-1.6908393