Issues with current market practices
Controlled by the Few: the carbon credit trading market is only open to selected players with huge balance sheets and financial resources.
Set Market Roles: Most individuals and SMEs can only offset NOT trade carbon credits. Thus their role has been decided by the primary market players to act as an exit strategy for the traders.
OTC Market: There is a lack of transparency in price and volume traded in the OTC Market.
Pricing of New Carbon Credits: the lack of transparency means pricing for newer carbon credits can be manipulated and controlled by the primary market players.
Carbon Credit Ownership: the carbon credit registries do not record current ownership of carbon credits or do not possess a system capable and robust enough to record changes in ownership.
Carbon Credit Offset Certification: unless you are a paid account holder of the carbon registries, an offset certificate will not be issued directly by the registries to you
In conclusion, since the carbon credit markets are primarily an OTC market, it has always been controlled by a few large players. These primary market players place large bids for new carbon credit issuance directly to project issuers. Trading activities then commence between these players until it reaches the website brokers. Website brokers are websites that allow individuals & SMEs to purchase carbon credit for offset purposes only, which essentially means they acted as the exit vehicle for the primary market players.
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