This means there is an opportunity for these companies to make a lot of money from this movement. Money loaned out at incredibly low interest rates. So, these companies receive two benefits by reducing their carbon footprint:
This will increase the demand for their shares. This means that as long as they stay “green” they can borrow money at a greatly reduced interest rate.Ĭompanies who lower their carbon footprint will attract new investors - who have avoided the extraction industries, that create a large carbon footprint relative to their share price. For the first time, the oil and metal miners can tap into the low-cost source of capital available in the green bond market. Marin Katusa showed me how this does not have to be “unfair”. Many think this is unfair for these companies but ultimately these changes will benefit these companies. Do you see the incredible demand? There is a huge carbon credit demand and not nearly enough to meet that demand. And Shell – just one company – just took 45% of those available. using any fossil fuels – such as coal, oil and natural gas will all need these carbon credits. Companies in the power, steel, textile, fertilizer, etc. Both Exxon and Chevron have changes happening there as well.Īll of these companies, and so many more will be in desperate need of Carbon Credits. You can see immediately how the Shell ruling will have implications for climate cases around the world. To meet target emission cuts, Shell would need to buy 45% of ALL the voluntary carbon market credits issued last year. In 2020, 223 million voluntary carbon market credits were issued. One credit permits the emission of a mass equal to one ton of carbon dioxide. Let’s put that in perspective…Ī carbon credit is a permit that allows the company that holds it to emit a certain amount of carbon dioxide or other greenhouse gases. This means that Shell needs to buy (and/or create) over 100 million carbon credits a year for the next decade. Marin Katusa explained that Shell, one of the biggest oil producers in the world, lost a court ruling and must now legally be responsible to cut their greenhouse emissions by 45% by 2030. The problem is few of those companies actually have a plan to reduce their carbon emissions. In order to get access to this cheap money huge companies have to make commitments to reduce their pollution. Why does this matter? If a company can meet the requirements of this bond market, they can borrow money at extremely low prices. This green market has trillions of dollars in it. The government has created a “green bond market”. Marin Katusa is my brilliant friend and I have invested a lot of money with Marin in this Carbon Credit Market. I am about to explain the Carbon Credit Market below. What matters is that when you understand the rules, you can profit.įull disclosure as you read on. Whether you agree with this direction of government policy does not matter. Companies can choose to embrace this movements or they can suffer. In July 2021 democrats agreed on 3.5 trillion-dollar domestic spending plans, highlighting considerable spending to fight climate change. This is a policy Marin Katusa from Katusa Research explained to me. Give me a little extra room to explain this using the new “green” policies.
#CARBON CREDITS FOR SALE CODE#
I write about the tax code regularly but rarely get into the policy aspect. There are many scenarios like this in the tax code that incentivize investors and entrepreneurs to do activities the government is looking for. Because of this, there are many tax credits for affordable housing that developers and investors can take advantage of that minimize their tax liability, put more money in their pocket, and in turn, create affordable housing. For instance, the government wants cheap housing. In short, the many credits and breaks that are found in the tax code are there precisely because the government wants you to take advantage of them. Government leaders learned a long time ago that the tax codes could be used to make people and businesses do what they want by utilizing the tax code. You look at the tax code and look at policy. Where do you look for these rules? Follow the money. The key is to learn and understand the rules. It does not matter who is in office – from a wealth building perspective – you can build wealth.
I’ve said for nearly two decades that the path to wealth is not accomplished by changing the system. How the new Carbon Credit market allows everyone to benefit from large companies going green
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