Introducing the Panel Session - Carbon Credits: The Next Financial Instrument

On the 08^th December 2023, I will chair a panel discussion for the Institute of Electrical & Electronic Engineers GreenTech, Sustainability, & Net Zero Policies & Practices Symposium.  This is a programme in alignment with the United Nations Clmate Change 28^th Conference of Partners (COP28), in the Green Zone, at Expo City, Dubai, United Arab Emirates.  The title of the session is “Carbon Credits: The Next Financial Instrument.” 

The panellists for the session are as follows:

1.      David Chen C. Y.; Chief Executive Officer; AgriG8

2.      Dr. Vincent Lim Boon Heng; Chief Financial Officer, Asia-Pacific; DataLogic

3.      Dr. Victor Tay; Group Chief Executive Officer; RHT Consulting Asia 

According to the OECD Environmental Outlook to 2050: The Consequences of Inaction - Key Facts and Figures, climate crisis is expected to cost the global economy 5.5% of GDP by 2050.  The number varies according to sources, but as of COP21 according to the World Bank, US$23 trillion will be lost in lost GDP output.  At this point, emission reductions are not enough, and the world is looking for alternative solutions.  We need to find a way as a united world to make this work.  For carbon credits to work, we need to consider expanding the compliance market to include high-quality investment-grade carbon offset credits.  Given the recent greenwashing scandals, coupled with the existing rating agencies that are not uniform in their processes, established global financial rating standards need to be set up for carbon credits in both the compliance and voluntary markets. 

All stakeholders should work towards a sustainable framework to create investment-grade, rated carbon credits, so that we can support a secondary market as a source of revenue.  Carbon credit derivatives would generate interest in the trade, create a new class of financial instruments, and attract a new influx of funding.  The capital injection could be the start of the 5^th industrial revolution: a post climate change world.  We need the buy in of the private sector through an appeal to self-interest, not altruism, as we move away from traditional sources of energy into renewables.  One of the fastest ways to achieve this is through a mature carbon trading market. 

Our goal for this session is to provoke a deeper conversation with stakeholders on the need for investment-grade carbon credits, a unified global rating system, and pivoting carbon trading towards high-quality investment-grade offsets.