Carbon markets have the potential to dramatically reduce compliance costs in future carbon regimes – what carbon will cost is the trillion-dollar question facing governments and corporations alike. Choices regarding the “when and how” of carbon market entry will fundamentally affect the competitiveness of both regulated GHG emitters, and companies offering GHG mitigation solutions. DNV’s climate change team can help companies understand and plan for carbon markets through a variety of products and services.

Purpose

Carbon markets are based on climate change policy and remain fundamentally uncertain. The challenge facing companies is how to make decisions in the short to medium terms that stand the best chance of proving robust in the face of uncertainty about the future.

Benefits

Many decision makers see the future of climate policy as pivotal to influencing their future competitiveness, whether at the company or sector level. With the right information and tools for understanding and anticipating carbon markets, government and corporate decision makers can make much more robust decisions across a range of business topics:

• Assessing and quantifying future carbon risk
• Making material capital investment decisions
• Making strategic and R&D decisions
• Determining corporate policy and legislative positions
• Assessing the advantages of early emissions reductions
• Protecting long-term corporate competitiveness

Features

DNV has developed a powerful suite of tools and associated services that provide customers with the ability to make more robust business decisions in the face of policy and market uncertainties. Waiting for these uncertainties to be resolved simply isn’t a viable option for companies facing material impacts from climate change policy, and from carbon markets. Examples of specific areas where DNV can help include:

Market forecasting
DNV experts have been helping companies make better carbon market decisions since carbon markets first appeared more than twenty years ago. This includes the development of decision support tools that help companies understand both global and region-specific carbon markets, and processes by which companies can integrate carbon price forecasts into their decision making that appropriately reflect their view of the world, as well as their risk profile and sensitivity to different risks.

Project, portfolio, and sectoral support
DNV experts have been helping companies evaluate mitigation projects, portfolios, and even sectors for more than 20 years. At the project level we have developed sophisticated Monte Carlo based project assessment tools for clients’ use in evaluating project opportunities. At the portfolio level we have developed decision-support tools that allow a comprehensive GHG project portfolio to be evaluated against alternative risks, and expressed through balance sheets and profit and loss statements. At the sector level, our global market assessments (GMAs) provide a deep dive into specific offset sectors, providing a roadmap for entering the carbon market through those sectors.

Project development support
DNV staff has developed project methodologies for a variety of regulatory and voluntary carbon standards. Through our buyers’ and sellers’ Reports, we offer companies a cost-effective due diligence assessment of specific projects and technologies, and how they are likely to fare in alternative carbon markets. And through our global market assessments, we can help actually identify specific project opportunities.

Our experience

Our experts have more than 20 years of experience in helping companies understand and participate in carbon markets. We have worked with companies of all sizes, and from all parts of the world, in assessing carbon risks and opportunities, and in the development of corporate strategies that effectively manage these risks and opportunities in both voluntary and regulatory markets.