The world needs the carbon market to reach net zero
And to scale, the market needs better tools to manage risk
Our global goal
In the 2015 Paris Climate Agreement, the world agreed to reach a global net zero by 2050. To help reach that goal, almost half of the world's top 2,000 companies, in addition to the countries that are party to the Paris Agreement, have set 2030 net zero targets.
But to reach a global net zero, we cannot reduce carbon emissions alone. The Intergovernmental Panel on Climate Change (IPCC) estimates that 6 gigatons of carbon dioxide must be removed from the atmosphere each year by 2050. We also have to build mechanisms to conserve the natural carbon sinks we already have.
But today, the latest research estimates that natural and technological carbon dioxide removal methods are only removing 2 gigatons per year.
The problem
Reaching our global net zero goal will require enormous financial investment. By some estimates, the carbon market is set to top $1.2 trillion by 2050.
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But right now, many corporate buyers and financial institutions are sitting on the sidelines, in part because financing carbon projects is still too vulnerable to a number of risks.
For the past 100+ years, markets have mitigated risk and made large investments possible with insurance. But insurance has not been available at scale in the carbon market.
Nothing gets financed ordinarily without insurance, but the financing of the largest capital expenditure of all time, the protection of nature-based solutions and expansion of new carbon and biodiversity credit markets, are being attempted largely without mobilizing the power of insurance.
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BCG and Howden (2024)
The solution
The carbon market needs a de-risking mechanism to enable investors to deploy capital with confidence, to give corporate buyers peace of mind in their credits' integrity, and to allow developers to scale their projects securely.
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At CarbonPool, we are building just that: An insurance solutions provider tailored to the carbon market.
We want to solve built-in market inefficiencies like the buffer pools, which constrain project supply, dampen investor returns, and force developers to assume the entire liability for permanence.
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We want to give investors the confidence to deploy the equity and lending at scale that is needed to reach our 2050 global net zero goal. ​
Our vision
At CarbonPool, we want to unleash the power of insurance for the carbon market.
Insurance makes markets work by transferring risk to a regulated entity whose job it is to price risk efficiently and to pay its claims - meaning that investors feel safe investing, buyers feel safe buying, and developers feel safe developing.
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Moreover, insurance is a time-tested, well-understood mechanism governed by regulatory authorities. Unlike self-insurance mechanisms currently used across the market, insurance is a highly regulated solution with rigorous solvency requirements, ensuring that clients can rely on their insurers to pay out even in catastrophic scenarios.
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At CarbonPool, we are bringing the tried-and-true risk mitigation tool of insurance to the carbon market. In doing so, we can unleash the investments needed to reach global net zero by 2050.
