Summary of the Report:

Capital raised/committed:

• In the period between January 2021 and June 2023, $18 billion was raised or earmarked for investment in funds related to carbon credits. For 2024 and 2025, an additional commitment of $3 billion is expected. Most of this funding ($15 billion, or 80 percent) is planned for nature-related projects. A third of this funding comes from companies, including some of the world’s largest, investing to secure long-term access to carbon credits.

Investment in projects:

• In the previous three years, almost the entire capital raised was invested in carbon projects, with $7.5 billion invested in the last year alone. From 2012 to 2022, the total invested in carbon credit-related projects was $36 billion. Of these, nearly half have been devoted to nature-related projects, with the share rising to 50 percent in the past three years. The East Asia and Pacific region saw the largest share of investment, followed by South Asia and sub-Saharan Africa. Investment over the past three years is five times the value of the global carbon credit market, a sign of a fast-growing sector.

Future capital needs:

• At the current rate, investment in carbon credit projects covers only one-third of the level needed to provide the required volume of credits by 2030 under a 1.5°C scenario. This means that an additional investment of $90 billion will be needed by 2030. In a more conservative demand growth environment, the investment needed by 2030 would be between $10 billion and $40 billion. By 2050, the cumulative investment required in carbon credits to achieve a 1.5°C pathway would be $1.6 trillion.

Climate outcomes and benefits:

• Since the beginning of 2020, more than 1,500 new carbon credit projects have been developed and registered, with an emission reduction capacity equivalent to that of the UK. In July 2023, registered nature-based projects worldwide covered an area of about 30 million hectares, an area comparable to that of Italy, Poland or Ecuador. Of this area, three-quarters is devoted to REDD+ projects to protect forests, particularly in tropical countries. An additional 80 million hectares are also planned to be developed as carbon projects.