A benchmark price for carbon credits – known as CBL GEO – has galloped from about $US75¢ last October to more than $US7.50 at the end of last month.

“The market has already woken up and realised there’s a very interesting asset class here and COP26 just happens to be a catalyst to talk about it,” said Ben Stuart, who co-founded CBL, a global exchange for energy and environmental commodity assets. The firm’s GEO contracts, which aim to provide a transparent and tradeable benchmark for the global carbon market, have since October 2020 become the world’s best performing commodity, Stuart said.

Volumes have also surged. Last year, CBL traded carbon credits accounting for 30 million tonnes. That has jumped to 100 million tonnes so far this year. Mr Stuart agreed that supply of carbon credits “is definitely tightening up” as companies hoover up credits to meet their decarbonisation promises. “It was not so long ago that we’d talk to talk companies, and they’d ask us what an offset is.”

“It’s been helped by things like COP and Glasgow, but it’s actually driven by financial markets, by banks, lenders and financiers looking for more favourable rates, and being able to display ESG credentials,” Mr Stuart said. “That’s driving the market more than regulation.”