New Study By BeZero And Viridios AI Reveals Impact Of Rating On Nature-Based Carbon Credits Price

New Study By BeZero And Viridios AI Reveals Impact Of Rating On Nature-Based Carbon Credits Price - Carbon Herald

BeZero has recently unveiled the findings of its second edition study, shedding light on the impact of rating on the price of carbon credits. 

The analysis conducted by the carbon rating agency delved into the relationship between BeZero ratings assigned to CO2 credit projects from various sectors and their pricing on the market.

What emerged from the study was a validation of this connection, especially evident in credits originating from nature-based solutions. 

Relevant: Bezero Carbon And General Index Partner To Marry Carbon Credit Quality With Price

According to the analysis,which utilized data from Viridios AI prices, for each BeZero carbon rating notch given to a project, there is an average premium of approximately 30% added to the market price of the credit. This means that higher-rated credits command a higher price in the market due to their superior ecological performance.

This correlation between ratings and prices is particularly pronounced in the nature-based solutions (NBS) sector, where each BeZero rating notch results in an average price increase of 20%. 

This demonstrates the market’s recognition of the value that nature-based projects bring in terms of carbon sequestration and climate mitigation and signals that investors and buyers seem to be more willing to pay a premium for credits that have been verified to deliver real and tangible environmental benefits.

Read more: New $1M Facility Focused On Nature-Based Carbon Projects Launched At COP28

BeZero also found that within nature-based projects, the sector of improved forest management (IFM) showed the greatest difference in prices between projects with higher and lower ratings. However, they point out that this observation is based on a limited sample size, and further research may be needed to confirm these findings.

Another key finding of the analysis is the confirmation of a clear connection between the issuance of ratings and the market value and demand for NBS credits. Projects with lower ratings experienced greater price drops compared to the NBS average, whereas projects with higher ratings were able to preserve their value. 

Moreover, projects with higher ratings saw a notable surge in demand in the past few months, indicating a growing appetite for projects that offer quality, transparency, and accountability in an increasingly competitive landscape.

1 comment
  1. > BeZero has recently unveiled the findings of its second edition study

    Is it published somewhere accessible?

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