Carbon Market Dynamics: Supply, Demand & Price
Understanding how carbon credit markets work and what drives price fluctuations
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Section 4 of 5The Carbon Credit Marketplace
Carbon credit markets operate like any other commodity market, with prices determined by the balance of supply and demand. However, carbon markets have unique characteristics that make them particularly dynamic and complex.
Supply comes from offset projects that reduce or remove greenhouse gas emissions. Demand comes from companies, governments, and individuals seeking to offset their emissions. Market prices reflect the cost of achieving emission reductions and the value society places on climate action.
Market Structure
Compliance Markets: Regulated markets where companies must buy credits to meet legal requirements • Voluntary Markets: Private transactions for corporate sustainability goals • Spot vs. Futures: Immediate delivery vs. forward contracts
Interactive Market Dynamics Simulator
Explore how different market factors affect carbon credit prices. Select factors, adjust time ranges, and test market scenarios to understand price dynamics.
Market Factors
Select the factors influencing carbon credit prices. Watch how the price chart changes in real-time.
Carbon Credit Price Trends
Market Scenarios
Test how different market events affect carbon credit prices. Click on a scenario to see its impact.