Carbon offset market valued at $168 million

According to Thomson Reuters, North American carbon offset markets saw a 70% value increase in 2011 in response to rising carbon prices and trade volumes.

Voluntary markets saw increased participation as large companies have begun to embrace corporate environmental responsibility. Recently Microsoft pledged to be carbon neutral beginning this fiscal year by improving the efficiency of its data centers, sourcing from renewable energy systems and purchasing carbon offset credits.

The mandatory California carbon market also generated a flurry of activity as the state’s regulated emitters have begun positioning themselves for compliance. California carbon allowances (CCAs) have been trading since last year, fetching a premium price of $16.50 a piece only a few weeks ago.

21 million carbon offsets traded in 2011, up from 16 million carbon offsets the previous year.

In anticipation of linking with the California carbon market in time for its January 2013 launch, Quebec will shortly release carbon offset project protocols that will generate interchangeable credits between the US and Canada. The California Air Resources Board (ARB) has been diligently working with Quebec officials to ensure that the regional carbon market will remain transparent and accountable despite extending over international lines.

According to a 2011 Barclays Capital report, the California carbon market will demand over 10 million offset credits annually. Assuming Quebec is able to approve market regulations ahead of the January 2013 market launch, demand for California carbon offsets will only increase.