Carbon finance: why deals to fund nature-based climate mitigation and adaptation no longer count on carbon credits
- ‘These projects have to stand on their own without revenue from carbon credits,’ one financier says
- Such projects appeal to more mainstream investors after controversies over the environmental worthiness of certain forestry-protection projects
Financiers of nature-based projects that seek to reduce and capture carbon emissions while also enhancing developing nations’ resilience against climate change are focusing on investments that are viable even without carbon-credit revenues, according to Hong Kong-based capital providers.
Such projects appeal to more mainstream investors after controversies over the actual environmental benefits of certain forestry-protection projects upon which carbon credits are based, said Julien Martin, founder and CEO of Digital Climate Group (DCG).
“Before, people invested in these projects either because they are charities, or they were interested in the carbon credits,” said Martin, who previously held senior roles developing offshore yuan, bonds and carbon credit products at financial institutions.
“But now they do it because there are potential financial returns on top of these. The door has been opened to a whole new type of investor.”
