CO2 offsets: an USI survey on voluntary market potential

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How are Voluntary Carbon Markets (VCM) perceived by potential buyers of CO2 offset credits? SIX Group has published a paper produced in collaboration with UniversitÓ della Svizzera italiana, presenting the result of a survey coordinated by Professor Eric Nowak, Director of the Center for Climate Finance and Sustainability, and Peter Gruber, lecturer-researcher at the Faculty of Economics.

To achieve the target of zero net emissions by 2050, set at the international level to counter the most severe effects of global warming, several strategies will need to be implemented. One such strategy is trading carbon credits in a Voluntary Carbon Market. This allows companies to purchase certificates that offset emissions they cannot directly reduce. Voluntary Carbon Markets are still in a nascent phase, with challenges in terms of product quality, liquidity, and price transparency.

The opinions of current and potential users of the Voluntary Carbon Markets are essential for understanding the possible evolution of carbon credits. For this reason, the SIX Group, which operates the Zurich Stock Exchange, decided to collaborate with UniversitÓ della Svizzera italiana to conduct a survey. The study was conducted by Master of Finance students Pietro Bonazzi , Eleni Gkagkari , Gaia Zanellini and Federico Brovarone. "This collaboration highlights both the quality of our students and the growing visibility of our expertise in climate finance and the voluntary carbon market," said Professor Eric Nowak.

The survey results, summarised in the white paper " 2023 Voluntary Carbon Markets ", show a strong interest in carbon credits yet reveal general dissatisfaction with the current state of VCMs. Proposed improvements include more transparency with respect to pricing and product quality as well as the introduction of a centralised exchange to remedy low liquidity. The introduction of a centralised exchange is mentioned as a possible remedy for liquidity and price problems. Regarding the use of blockchain and the tokenisation of carbon credits, participants expressed their interest in these technologies. However, they also emphasized the need for more concrete evidence of the benefits.