Tribeca Investment Partners, which manages $3.2 billion in assets, has purchased $100 million worth of carbon credits. Portfolio Manager and Partner Ben Clearly says, “We are seeing a major demand from Asian corporates for offsets, above and beyond their organic carbon reduction programs.”
- He expects the price of carbon credits in the Asia-Pacific to increase substantially.
With growing interest in carbon offsets across the globe, it’s no wonder this hedge fund is choosing to bet big.
Microsoft, Walt Disney Co, and Royal Dutch Shell plc are currently purchasing offsets to draw their own emissions. Countless other corporations are following their lead, viewing offsets as a tangible way to help remove carbon dioxide from the atmosphere.
Tribeca’s focus is on carbon credits that qualify for programs such as the Australian Carbon Credit Units or the United Nations’ REDD+ framework. These credits are expected to top $100 a ton over the next few years. Currently, they average about $8-$10 for high-quality projects.
Another goal for Tribeca is to raise $500 million for a new decarbonization-focused fund invested in climate-friendly plastics, chemicals, and food.
Though the global carbon market can hit $22T by 2050, critics are not so sure.
Some question whether carbon offsetting is effective enough to meet aggressive reduction goals. They also ask whether it is possible to prove carbon was removed from the atmosphere, especially for projects tied to cheaper credits.
According to Eli Mitchell-Larson, a researcher at the University of Oxford, “We need to ensure that these credits are having actual, high-certainty climate impacts before we rejoice in this growth. Otherwise, we’re going to have another boom-and-bust where buyer confidence is shattered.”
His concerns are valid – which is why the carbon offset industry needs additional verifications in place to ensure it is achieving all it promises to deliver.