Bloomberg and Three Cairns Group form global carbon trust

Mission-driven investment and philanthropic firm Cairns Group and former Mayor of New York City Michael Bloomberg announced the formation of a new global initiative called the Carbon Trust.

The aim of the trust is to help countries and companies transition to a low-carbon economy by providing them with the financial and technical resources they need to implement carbon-reducing projects and technologies.

There is a large potential demand as part of global company's net transition to net zero pathways. However, there is still hesitation due to the fact that VCM´s lack of standardized contracts, unreliability of carbon removal and storage projects in the long-term and lack of  intermediaries between buyers and sellers. There are also concerns about carbon credit verification delays costing project developers $2.6 billion. 

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The Trust will establish the GCT and the Carbon Storage Governing Council to support governance and increase availability of projects and standardize financial contracts to attract market participants.

It will also provide funding for projects through the sale of verified carbon credits (VCM), generated by reducing or removing greenhouse gas emissions. These credits can then be sold to companies and governments that are looking to offset their own carbon emissions.

The trust will also provide technical assistance to help countries and companies develop and implement carbon-reducing projects and technologies. Representatives to the council are from academia, industry, and civil society and its primary aim will be to scale up the VCM.

The GCT will also work to improve transparency and accountability in the carbon credit market and  address the need for term-limited, fungible carbon credits backed by enforceable standardized carbon credit contracts: This will develop arbitration and compensation processes for credits that fail to meet targets, thus increasing supply of high-quality carbon credits.