Energy firm U.S. Venture taps the carbon futures market to hedge forecasted emissions for clients, as well as securing carbon credits for their own needs
“As project developers for farmers, forest owners, and waste sites, we use futures to manage risk and monetize credits for clients,” Alex Haas, environmental credits manager for U.S. Venture, said in an interview.Carbon offsets, which have been in use at least since the early 2000s, are transferable instruments that are typically certified by independent entities or governments. Each credit often represents a reduction of one metric ton of carbon dioxide, or an equivalent greenhouse gas.
“Having a clear price signal is important for companies, giving them the confidence to move forward,” said Sarah Leugers, Chief Strategy Officer for Gold Standard, a registry that certifies carbon offsetting projects. In an interview, Leugers said futures contracts and other spot markets can contribute to the “stability of the price signal.”Haas at U.S. Venture notes that both the spot and futures carbon markets are important for companies managing their GHG emissions.
“Only a small percentage of voluntary carbon credits meet the standards set by GEO and N-GEO contracts, so buying these credits ensures a meaningful contribution is being made and a price signal will be sent to environmental project developers that we need more,” said Haas.
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