Over the weekend the Washington Spectator published my essay, Diary of a Transit Miracle, recounting the arduous march of NYC congestion pricing from a gleam in a trio of prominent New Yorkers’ eyes at the end of the 1960s, to the verge of startup at the upcoming stroke of midnight June 30, the startup time announced by the MTA last Friday.
Landing page for this post’s original version.
I’m cross-posting it here — the third post on the subject in this space in the past 12 months (following this in December and this post last June) — because the advent of congestion pricing in the U.S. is “a really big deal,” as a number of friends and colleagues have told me in recent weeks. As my new essay makes clear, charging motorists to drive into the heart of Manhattan isn’t just a rejection of unconstrained motordom, it’s a new beachhead in “externality pricing” — social-cost surcharging — of which carbon taxes are the ultimate form.
The essay features two governors, two mayors — one of whom I served a half-century ago as a lowly but admiring data cruncher — a civic “Walter Cronkite,” a Nobel economist, raucous transit activists, a gridlock guru and yours truly, plus a cameo appearance by Robert Moses. It includes footage of the historic 1969 press conference in which Mayor John Lindsay and two distinguished associates enunciated the core idea of using externality pricing to better balance automobiles and mass transit that animated the arduous but ultimately triumphant congestion pricing campaign.
— C.K., April 29, 2024
Diary of a Transit Miracle
A miracle is coming to New York City. Beginning on July 1, and barring a last-minute hitch, motorists will soon pay a hefty $15 to enter the southern half of Manhattan — the area bounded by the Hudson River, the East River and 60th Street.
An anticipated 15 percent or so of drivers will switch to transit, unsnarling roads within the “congestion zone” and routes leading to it. The other 80 or 90 percent will grumble but continue driving. That is by design. The toll bounty, a billion dollars a year, will finance subway enhancements like station elevators and digital signals that will increase train throughput and lure more car trips onto trains.
The result will be faster, smoother commutes, especially for car drivers and taxicab and Uber passengers, who will pay a modest surcharge of $1.25 to $2.50 per trip. Drivers of for-hire vehicles will benefit as well, as lesser gridlock leads to more fares.1
The miracle is three-fold: Winners will vastly outnumber losers; New York will be made healthier, calmer and more prosperous; and that this salutary measure is happening at all, after a half-century of setbacks.
Obstacles to congestion pricing
Congestion pricing, as the policy is known, faced formidable obstacles even beyond the difficulty inherent in asking a group of people to start forking over a billion dollars a year for something that’s always been free.
Congestion pricing also had to contend with: an ingrained pro-motoring ideology that casts any restraint on driving as a betrayal of the American Dream; a general aversion to social-cost surcharges (what economists call “externality pricing”); exasperation over the region’s balkanized and convoluted toll and transit regimes; and, of late, a decline in social solidarity and appeals to the common good.
The advent of congestion pricing in New York is, thus, cause not just for celebration but wonderment. How did this wonky yet radical idea advance to the verge of enactment?
Origins
The trail begins in the waning days of 1969, when newly re-elected mayor John Lindsay recruited two well-regarded New Yorkers to devise a plan to fend off a 50 percent rise in subway and bus fares.
William Vickrey, a Canadian transplant teaching at Columbia and a future Nobel economics laureate, was a protean theorist of externality pricing. New York-bred mediator Theodore Kheel was admired as a civic Walter Cronkite for his plain-spoken common sense.
Lindsay, too often dismissed as a lightweight, understood mass transit as key to loosening automobiles’ spreading chokehold over the city. He had made combating air pollution a pillar of his first term and was fast becoming an exemplar of urban environmentalism. From his municipal engineers, Lindsay knew that technology to clean up tailpipes still lay in the future. A transit fare hike that would add yet more vehicles to city streets imperiled his clean-air agenda.
The triumvirate proposed a suite of motorist fees to preserve the fare. Their program ― higher registration fees and gasoline taxes, a parking garage tax, doubled tolls ― though mild in today’s terms, threatened powerful bureaucracies and their auto allies. Newly dethroned “master-builder” Robert Moses opined that Kheel, in his zeal to save the fare, had “gone berserk over bridge and tunnel tolls.”2 The program went nowhere.
L to R: Kheel, Lindsay, Vickrey. Click arrow to view (please excuse two brief garbled passages toward end).
Moses was right to be alarmed. From a City Hall podium on Dec. 16, 1969, Mayor Lindsay showcased Kheel’s and Vickrey’s respective reports, “A Balanced System of Transportation is a Must” and “A Transit Fare Increase is Costly Revenue.” (Click link in still photo above to view 27-minute video.) The trio propounded a new urban doctrine rebalancing automobiles and public transportation: “Automobiles are strangling our cities… Starving mass transit imposes costs that are difficult to measure, yet real… Correcting the fiscal imbalance between transit and the automobile is key to enhancing our environment and quality of life…”
Their remarks set generations of urbanists on course toward congestion pricing.
Setbacks
Quantifying those precepts became my research agenda 40 years later. In the interim, two creditable attempts to enact congestion pricing crashed and burned.
The central element of Lindsay’s 1973 “transportation control plan” was tolls on the city’s East River bridges, a measure designed to eliminate enough traffic to satisfy federal clean-air standards. Though the plan’s formal demise didn’t come until 1977, in legislation written by liberal lawmakers from Brooklyn and Queens, the toll idea never stood a chance. Electronic tolling was 20 years away, and adding stop-and-go toll booths seemed more likely to compound vehicular exhaust than to cut it.
Three decades later, in 2007, Mayor Michael Bloomberg asked Albany to toll not just the same East River bridges but also the more-trafficked 60th Street “portal” to mid-Manhattan. Predictably, faux-populist legislators saw Bloomberg’s billionaire wealth as an invitation to denounce the congestion fee as an affront to the little guy.
The mayor may have hurt his cause by presenting congestion pricing primarily as a climate and pollution measure. The pollution rationale was no longer compelling in the way it had been in Lindsay’s day, as automotive engineers had slashed rates of toxic vehicle exhaust ten-fold. Appeals tied to global warming also fell flat; remember, congestion pricing contemplated that most drivers would stay in their fossil-fuel burning cars.
This isn’t to say that congestion pricing confers no climate benefits. Rather, the benefits are subtler ones that can be hard to convey to voters, such as making climate-friendly urban living more attractive. A further benefit may come as congestion pricing demonstrates the unique power of externality pricing, as explained below.
From the Rubble
Even as Bloomberg’s toll plan was faltering in Albany, new loci of support were germinating in the city.
Changing times demanded not just the intellectual leadership of think-tanks like the Regional Plan Association and the good-government Straphangers Campaign, but gritty, grassroots transit organizing. Enter the newly-minted Riders Alliance.
2017 subway handbill exemplified new militancy targeting Gov. Andrew Cuomo for failing transit.
As subway service began cratering in 2015, the inevitable result of budget-raiding by a skein of governors, the Alliance posted crowd-sourced photos of stalled trains and jammed platforms alongside demands for improved service from “#CuomosMTA.” Before long, the papers were pointing the finger at the governor not just in “Why Your Commute Is Bad” explainers but in tear-jerkers like the Times’ May 2017 classic, “Money Out of Your Pocket”: New Yorkers Tell of Subway Delay Woes.
The drumbeat was deafening. Cuomo finally blinked. On a Sunday in August 2017, he phoned the Times’ Albany bureau chief and handed him a scoop for the next day’s front page: Cuomo Calls Manhattan Traffic Plan an Idea ‘Whose Time Has Come’.
The “traffic plan” was congestion pricing.
Data Cruncher
Two months later, Cuomo’s staff summoned me to the midtown office of the consulting firm they had retained to “scope” congestion pricing ― essentially, to compute how much revenue tolls could generate. They wanted to see if an Excel spreadsheet model I had constructed and refined over the prior decade could aid their scoping process.
The model was called the Balanced Transportation Analyzer, a name bestowed in 2007 by Ted Kheel.
Ted, in his nineties, had recruited me to determine whether a large enough congestion toll could pay to make city transit free. The idea worked on paper but foundered politically. Nevertheless, Ted saw in my Excel modeling a way to capture phenomena like “rebound effects” (motorists driving more as road space frees up) and “mode switching” between cars, trains, buses and taxicabs, that he and Prof. Vickrey had identified in their 1969 work but lacked the computing ability to quantify.
Ted’s philanthropy enabled me over the next decade to expand, test and update my transportation modeling. With a hundred “tabs” and 160,000 equations, the “BTA” can instantly answer almost any conceivable question about New York congestion pricing, as well as these two central ones: how much revenue it will yield, and how much time will travelers save in lightened traffic and better transit.3
The BTA model aced its 2017 audition and became the computational engine for the congestion pricing legislation the governor’s team enacted into law in 2019. Its impact has been even broader.4 “Having the model helped make the case with the public, journalists, elected officials and others,” Eric McClure, director of the livable-streets advocacy group StreetsPAC, wrote recently, in part by helping congestion pricing proponents push back on opponents’ exaggerated claims of disastrous outcomes and their incessant demands for special treatment. The model may also have influenced the detailed toll design adopted by the MTA board earlier this year, which hewed close to the toll design I had recommended last summer.5
The BTA also provided sustenance during congestion pricing’s seven lean years ― the 2009-2016 period in which the torch was kept lit by a new triumvirate known as “Move NY” ― traffic guru “Gridlock” Sam Schwartz, the very able campaign strategist Alex Matthiessen, and myself. The model helped our team evangelize congestion pricing’s transformative benefits to elected officials and the public. This, I believe, was a key element in mustering the critical mass of support that ultimately swayed not one but two governors.
The Hochul Factor
New York Lieutenant Governor Kathy Hochul’s ascension to governor in August 2021 could have been congestion pricing’s death knell. The toll plan was adrift in the federal bureaucracy, and its latter-day champion Andrew Cuomo had exited in “me-too” disgrace. His successor, from distant Buffalo, wasn’t beholden to New York or congestion pricing.
Hochul, who as governor controls city and regional transit, could have disowned congestion pricing as convoluted, bureaucratic and tainted. Instead, she became a resolute and enthusiastic backer. Her spirited support, both in public and behind the scenes, became the decisive ingredient in shepherding congestion pricing to safety.
Why the new governor went all-in on congestion pricing awaits a future journalist or historian. Had she spurned it, the opprobrium from downstate transit advocates would have been intense; but there doubtless would have been cries of “good riddance” as well. Vickrey, Kheel and Riders Alliance notwithstanding, it’s not clear how closely New Yorkers — including transit users — connect congestion tolls to improved travel and a better city.
What makes Hochul’s embrace especially impressive is that congestion pricing is, in a real sense, an attack on a jealously guarded entitlement: the right to inconvenience others by usurping public space for one’s vehicle. The classic lament about entitlements’ iron grip is that “losers cry louder than winners sing.”6 Yet in this case, it seems, potential losers — actual and aspiring zone-bound drivers — are being out-sung by transit interests seeking, in Kheel’s 1969 words, a better balance between public transportation and automobiles.
Credits and Prospects
Let us now praise Andrew Cuomo’s crafting of the legislation that teed up congestion pricing’s successful run.
Rather than specifying a dollar price for the tolls, or a precise traffic reduction, his 2019 bill established a revenue target: sufficient earnings to bond $15 billion in transit investment — which equates to $1 billion a year to cover debt service. This device trained the public’s focus on the gain from congestion pricing (better transit) instead of the pain (the toll). Equally important, with this deft stroke, any toll exemption that a vocal minority might seek would mathematically trigger higher tolls for everyone else. The effect was vastly heightened scrutiny of requests for carve-outs.
Which cities will follow on New York’s heels? No U.S. urban area comes close to our trifecta of gridlock, transit and wealth. Sprawling Los Angeles or Houston, or even Chicago for that matter, might be better served by more granulated traffic tolls than New York’s all-or-none model.
Perhaps Asia’s megalopolises will be swept up in our wake. In the meantime, my focus will be on the holy grail of externality pricing: taxing carbon emissions. Every economist knows that the surest and fastest way to cut down on a “bad” is by taxing it rather than subsidizing possible alternatives. Yet that approach remains counter-intuitive and even anathema to nearly everyone else.
A huge and important legacy that New York congestion pricing could provide is to prove that intelligently taxing societal harms need not be electoral suicide. This proof could help unlock a treasure-trove of prosperity-enhancing pricing reforms including, most prominently, robust carbon taxing.
The author, a policy analyst based in New York City, worked in Mayor Lindsay’s Environmental Protection Administration in 1972-1974. He met Bill Vickrey in 1991 and worked closely with Ted Kheel from 2007 to 2010.
Endnotes
- The new passenger surcharges of $1.25 for taxicabs and $2.50 for “ride-hails” (principally Ubers) apply to trips touching the congestion zone. These will be partially offset by lower fares owing to shorter wait-time charges due to faster travel speeds.
- Quote is from Moses’ August 23, 1969 guest essay in Newsday, “Is Rubber to Pay for Rails?” (not digitally available).
- The current version of the BTA is publicly available at this link: (18 MB Excel file).
- See Fix NYC Advisory Panel Report, Appendix B, 2019.
- A Congestion Toll New York Can Live With, July 2023, by Charles Komanoff, co-authored with Columbia Business School economist Gernot Wagner.
- As pronounced by University of Michigan economist Joel Slemrod, in Goodbye, My Sweet Deduction, New York Times, by Eduardo Porter and David Leonhardt, Nov. 3, 2005.
Carbon Footprint
Silver’s New Role in the Clean Energy Era – and What It Means for Sierra Madre Investors
Disseminated on behalf of Sierra Madre Gold & Silver Ltd.
Silver is prized for its beauty and use in jewellery, but its true value today lies in technology. Silver is now a key material as the world shifts to renewable energy, electric vehicles, and advanced electronics. Its high conductivity and reflectivity make it essential for solar panels, EV batteries, and 5G networks.
For investors, this shift marks a new chapter for the silver market – one driven less by fashion and more by function. Companies like Sierra Madre Gold & Silver are ready to meet this growing demand for industrial and investment needs.
Rising Demand from the Green Transition
The clean energy transition is rapidly changing how silver is used. The Silver Institute reports that global silver demand hit a record 1.2 billion ounces in 2024. More than 30 percent of this was for industrial uses, mainly in solar power and electronics. That figure is set to rise as countries expand renewable energy capacity.
In 2024, industrial silver use hit an all-time high of 680.5 million ounces, driven by solar manufacturing, electric vehicles, and electronics. Solar energy alone now accounts for more than 30 percent of industrial demand.
Each photovoltaic (PV) panel has 15–25 grams of silver. By 2030, solar installations may top 500 gigawatts each year. This could mean the sector needs 250 million ounces of silver annually.
Electric vehicles are another major source of growth. A single EV uses up to 50 grams of silver, roughly twice that of a traditional car. As production expands, the automotive sector’s silver demand could triple by 2030.
These trends are tightening the global silver market. Inventories are falling, and analysts warn of persistent supply deficits through the end of the decade.
The Supply Challenge: Falling Mine Output
While demand surges, mine output is not keeping pace. The Silver Institute estimates global silver production at about 819.7 million ounces in 2024, up less than 1 percent from the previous year.
Even with this small rise, the world will have a 117.6 million-ounce supply deficit in 2025. This shows ongoing long-term shortages.
Mexico remains the world’s largest silver producer, contributing about 23 percent of global output. But much of this comes from aging or polymetallic mines, where silver is a by-product. New producers like Sierra Madre Gold & Silver attract investors. They blend modern exploration with production. This is happening in one of the richest silver belts on Earth.
Sierra Madre’s Portfolio: Reviving Proven Silver Assets
Sierra Madre Gold & Silver Ltd. (TSXV: SM, OTCQX: SMDRF) is advancing two key projects in Mexico’s Sierra Madre mineral belt: La Guitarra and Tepic. Together, they represent a blend of production and exploration upside.
- La Guitarra Mine (State of Mexico):
La Guitarra, acquired from First Majestic Silver Corp., is a fully permitted and producing underground operation. It already has processing infrastructure in place. The company reached commercial production at 500 tonnes per day in January 2025, with plans to expand to up to 1,500 tonnes per day by 2027. La Guitarra could restore one of Mexico’s best-known silver mines to its former prominence. - Tepic Project (Nayarit):
Tepic is a high-grade epithermal gold-silver deposit. It has near-surface mineralization, which means there’s great exploration potential. This also allows for options for future growth.
Sierra Madre cuts costs and timeline risks by targeting assets with established infrastructure and clear development paths. This approach is safer than working with early-stage explorers.
Positioned for the New Industrial Cycle
The global shift to cleaner energy sources is reshaping the silver market into something closer to a strategic commodity. Governments and industries now view silver as vital to achieving energy-transition goals. As demand outpaces supply, producers with near-term restart potential stand to benefit most.
Sierra Madre fits neatly into that narrative. The La Guitarra project has restarted production much quicker than greenfield developments. Those often need years for permits and construction. At the same time, its exploration project adds scalability and long-term growth potential.
Mexico has a strong mining infrastructure and a skilled workforce. It’s also close to North American industrial hubs. This gives Sierra Madre a big logistical advantage. The U.S. is putting policies in place to secure supply chains for key materials. This makes Mexico a more important and reliable supplier.
Market Dynamics: Silver as a Strategic Metal
Silver’s 2025 price action underscores profound shifts in its role within both industrial and investment spheres. After climbing nearly 25 percent year-to-date, silver shattered previous records by reaching its all-time high of $54.24 per ounce in October before correcting and settling in the high-$40 range.
Major analysts such as Metals Focus project that prices could breach the US$60 mark by late 2026 if current supply deficits and clean energy demand trends persist, citing strong industrial momentum – particularly in solar and electronics – as critical drivers.
Supporting this rally, silver exchange-traded products (ETPs) absorbed 95 million ounces in the first half of 2025, pushing global holdings to 1.13 billion ounces – just 7 percent below their all-time peak.
According to data from the World Silver Survey 2025, industrial fabrication demand reached a new record of 680.5 million ounces in 2024, maintaining upward momentum through 2025. The supply side remains structurally tight: analysts project a market deficit of roughly 149 million ounces this year, marking five consecutive years where demand has outpaced annual mine production.
Why Sierra Madre Stands Out
- Production: La Guitarra restart completed, targeting output ramp-up in 2026 and 2027.
- High-Quality Assets: Two projects in Mexico’s most productive silver-gold belt.
- Operational Readiness: A fully permitted plant and infrastructure at La Guitarra reduced start-up costs.
- Strong Market Tailwinds: Silver demand from solar, EVs, and electronics continues to set records.
- Experienced Leadership: Proven management team with expertise in Mexican mining operations.
These factors make Sierra Madre a unique mix of production, exploration, and expansion potential, and access to one of the fastest-growing industrial metals globally.
A New Chapter for Silver – and for Sierra Madre
Silver’s growing role in the clean-energy transition marks a turning point for the mining industry. Once seen mainly as a precious metal, it is now a cornerstone of the technologies driving global decarbonization.
Sierra Madre Gold & Silver is one of the few junior miners that successfully restarted a permitted mine in Mexico’s silver heartland and is planning a near-term expansion. This positions them well to benefit from the current structural shift. With rising demand and limited supply, the company is ready to continue with its strategy for La Guitarra. This move connects Mexico’s rich mining history with a clean-energy future.
- READ MORE: Reviving Mexico’s Silver Belt: How Sierra Madre’s La Guitarra Mine Is Leading the Comeback
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Carbon Footprint
Indonesia Aims to Sell $1B Carbon Credits at COP30, While Other Countries Step Up Their Carbon Plans
Indonesia is making one of the biggest moves at COP30 in Belém, Brazil. The government aims to reach about US$1 billion (Rp 16 trillion) in carbon credit deals during the summit. The plan includes around 90 million tonnes of carbon credits from forestry, energy, and industry projects.
This goal is part of a wider plan to grow Indonesia’s carbon trading system. It follows new rules under Presidential Regulation No. 110 of 2025 on carbon economic value. It also comes after the country allowed international carbon trading again, following a four-year pause. These steps show that Indonesia wants to become a major player in climate finance and green investment in Asia.
At COP30, other countries are also stepping up their climate plans and carbon market initiatives. Nations like Brazil, Iraq, Singapore, Kenya, and the United Kingdom unveiled new projects, partnerships, and rules to boost verified carbon trading and ensure benefits reach local communities.
Building Stronger Rules and Partnerships
Indonesia used COP30 to prove it can build a fair and trusted carbon market system. The Ministry of Environment and Forestry introduced four new rules to improve how projects are managed and approved. The changes aim to make sure that money from carbon sales reaches local people, including indigenous groups.
To raise global trust, Indonesia signed new partnerships with leading organizations. It formed a Mutual Recognition Agreement with Verra, one of the world’s biggest carbon credit certifiers. This deal allows up to 50 million tonnes of CO₂ credits to enter global markets.
Indonesia also signed a memorandum of understanding with the Integrity Council for the Voluntary Carbon Market (ICVCM). This will help the country follow global standards for transparency and quality.
Indonesia is presenting 40 carbon projects at COP30. These include forest recovery work, renewable energy plants, and waste reduction programs. Together, they could generate more than 90 million credits once fully certified.
Officials see this as part of a long-term plan. The Forestry Ministry estimates that Indonesia’s carbon credit potential could reach 13.4 billion tonnes of CO₂ by 2050. That could bring yearly income of $2.8 billion to $8.6 billion, depending on carbon prices.
Economic gains and environmental wins
Government estimates show that Indonesia can cut emissions by 31.8% on its own and by 43.2% with global support. Carbon trading could help meet these goals by linking domestic projects with international buyers.
Indonesia’s projects range from mangrove restoration to geothermal power and the low-carbon industry. This diversity makes the country one of Asia’s most promising suppliers of carbon credits. However, success will depend on good governance, fair profit-sharing, and public trust.
If Indonesia reaches its US$1 billion target, it would be one of the largest carbon trade achievements for a developing nation. It could also inspire other countries in Southeast Asia, such as Vietnam, Malaysia, and the Philippines, to follow similar paths.
Global Carbon Moves at COP30: What Other Countries Are Doing
Indonesia is not alone in expanding carbon markets. At COP30, several other countries also announced new plans to link climate action with trade and investment.
Brazil, the host nation, launched an Open Coalition on Compliance Carbon Markets. The group now includes 11 countries, such as China, Canada, Mexico, the United Kingdom, and members of the European Union.
The coalition wants to connect national markets and create shared standards for tracking and reporting emissions. It also aims to stop “double-counting” of credits and make global trading more transparent.
Brazil is working on its own national cap-and-trade system that will cover energy, transport, and industry. Officials say the plan will help the country use its vast forests to generate high-quality credits. They also promise that indigenous and local communities will share in the profits from these projects.
In the Middle East, Iraq announced its first national carbon market during COP30. This is a big shift for a country still dependent on oil and gas. Iraq plans to use carbon market funds to support renewable energy, modernize infrastructure, and cut emissions from heavy industry. It hopes to attract international investors to help build new low-carbon projects.
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Meanwhile, the United Kingdom, Kenya, and Singapore launched a joint campaign to grow corporate demand for trustworthy carbon credits. Their goal is to set clear rules for how companies buy carbon offsets and ensure that every credit represents a real emissions cut.
Singapore is already one of Asia’s key carbon market hubs. It runs the Climate Impact X exchange and has signed several carbon trade deals under Article 6 of the Paris Agreement. The country acts as a bridge between credit producers in Southeast Asia and buyers in major financial markets.
Kenya is focusing on fairness and inclusion. It wants to make sure that African countries and local communities get a fair share of income from carbon projects. The country is building its own carbon credit export system based on lessons from other African nations.
Together, these efforts show that countries are now moving from promises to action. Each one is shaping its carbon market plan based on its strengths—Brazil’s forests, Singapore’s financial networks, Iraq’s energy sector, and Indonesia’s vast natural resources.
A Growing Global Network, Despite Challenges
Even as interest grows, carbon markets face challenges. Some projects have been criticized for exaggerating their climate impact or failing to help local communities. These issues have raised doubts about the real value of some credits.
“High-integrity” carbon credits were a major topic at COP30. Many delegates agreed that only verified, transparent credits would attract global investors. But developing nations also want flexible rules so smaller projects can join the market more easily. Finding a balance between strong oversight and easy access will be crucial.
The nations’ various moves reflect a shift toward teamwork. Countries and companies are learning that trading carbon credits can support both climate goals and economic growth.
The chart above shows the projected global carbon credit market size from 2025 to 2050. The range shows lower and upper bounds for 2030 and 2050 only, reaching up to $250 billion by 2050 (in 2024 prices).
Growth depends on demand: high demand with loose supply drives the market upward, while low demand with loose supply results in the lower bound. The range widens significantly by 2050, reflecting uncertainty in future policy, technology, and corporate demand.
Indonesia’s $1 billion carbon-trade goal at COP30 shows how fast the global carbon market landscape is changing. The country’s mix of policy reforms, new partnerships, and project pipelines demonstrates leadership among developing nations.
At the same time, efforts by Brazil, Iraq, Singapore, Kenya, and the United Kingdom reveal a broader global trend. Carbon markets are no longer experimental—they are becoming a major part of climate finance.
If these systems stay transparent and fair, COP30 could mark the start of a new phase for global carbon trading, one where countries and companies work together to cut emissions and invest in carbon markets.
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Carbon Footprint
Tencent to Form Carbon Credit Buyers’ Alliance: How Could it Transform China’s Carbon Market?
Tencent, one of China’s largest technology firms, plans to form a carbon credit buyers’ alliance to help expand the supply of credits in the market. The company aims to launch this initiative by the end of 2025.
Carbon credits allow companies to offset greenhouse gas emissions by supporting projects that reduce or remove carbon. As firms face growing climate targets, the supply of high-quality carbon credits is becoming a key issue. Tencent’s initiative may help meet demand while improving market trust.
Tencent’s Scale and Market Muscle
Tencent is well placed to lead such an initiative. In 2024, the company reported revenue of RMB 660.3 billion (almost US$92 billion), up 8% year-on-year. Its gross profit rose by 19%.
With such scale and financial strength, Tencent has the capacity to invest in market mechanisms and alliances. Its size gives it market power. This can attract other corporations, project developers, and tech partners to join the alliance.
Tencent’s share price has shown a notable rise year‑to‑date, with a gain of around 50 % over the past 12 months. On a more recent weekly basis, the stock recorded a smaller uptick of approximately 2 % over the past five trading days.
What Tencent Aims to Achieve
The news was revealed by Ella Wang, a senior program director at Tencent’s Climate Innovation Hub, in an interview at the United Nations’ COP30 climate summit in Brazil.
The alliance will bring together corporations, investors, and carbon project developers. Tencent’s main aim is to make more carbon credits available for companies that want to reduce their net emissions. Many businesses now have a hard time finding certified credits. They especially seek high-quality ones from verified projects.
Tencent also plans to introduce digital tools to track carbon credit projects. These tools will make it easier for buyers to verify that credits are genuine and that projects deliver real environmental benefits.
The company envisions a market where credits are easier to trade and pricing is more predictable. The alliance can standardize processes and verification methods. This will help prevent disputes and reduce market confusion.
Moreover, the use of credible carbon credits is part of Tencent’s strategy to reach its carbon neutrality goal.
How the Alliance Will Work
Tencent expects its carbon credit alliance to bring together firms from the technology, manufacturing, and consumer sectors across Asia. The aim is to boost supply from Global South countries and to create a collective demand signal.
The company signed a memorandum of understanding (MoU) with GenZero. GenZero is a decarbonization investment platform owned by Temasek. Under this MoU, Tencent can offtake at least one million verified carbon credits over 15 years. This means at least one million tonnes of greenhouse gases will be avoided or removed.
Digital tools will play a key role. Monitoring, reporting, and verification (MRV) technologies, possibly leveraging blockchain or advanced data, will help ensure that credits are real, measurable, and traceable. That helps raise trust in credits and the market. The alliance will also likely help:
- Support project developers to fund, certify, and issue credits.
- Ensure credits meet common quality standards.
- Create easier market access for buyers and sellers, reducing transaction costs and risks.
The Carbon Credit Market: China and Global Context
China’s carbon market is already big and growing. In 2021, the government started a national carbon trading system. This system includes key industries like power generation, cement, and steel. It allows companies to trade emission allowances and provides financial incentives to reduce pollution.
China’s national emissions trading system (ETS) includes over 5 billion metric tons of CO₂. This accounts for more than 40 percent of the country’s emissions.
Experts say that the use of digital tools and alliances like Tencent’s could help scale the market faster. Improved tracking and verification can make carbon trading more credible. Companies that were previously cautious may feel more confident in participating.
A recent study shows that China’s market contributes more than half of the global total among trading markets. The global voluntary carbon credit market is set to grow fast.
One estimate puts its value at $2.1 billion in 2025. It could reach $19.8 billion by 2035. Another forecast says the global carbon market could reach up to $250 billion by 2050 under the most favorable conditions.
Where Credits Fall Short and Prices Swing
The demand for verified, high-quality carbon credits currently appears to exceed supply in many markets. For example, when China reopened its voluntary carbon credit market in 2024, the price of the new China Certified Emission Reduction (CCER) credits briefly rose to 107.36 yuan (≈USD 14.82) per ton and then fell to 72.81 yuan (≈USD 10).
These swings reflect a mismatch of demand and supply, as well as price uncertainty. On the compliance side, China’s ETS currently covers over 2,200 power plants and industrial firms. Analysts say that as the market grows in steel, cement, and aluminum, it could cover about 8 billion metric tons. This is over 60% of China’s emissions.
Given this, companies that need credits to meet their emissions targets may face a tight supply of trusted credits. Tencent’s buyers’ alliance could close the gap. It would pool demand, aid verification, and boost supply.
Why Corporations Are Joining
Companies are under increasing pressure to meet net-zero or carbon reduction goals. High-integrity carbon credits give them a way to offset unavoidable emissions. By joining Tencent’s alliance, firms can:
- get access to a larger pool of credits,
- reduce the risk of buying low-quality or unverifiable credits,
- shape market standards together with peers, and
- benefit from the credibility boost of a coordinated group.
For smaller companies, the alliance can help them get credits at a lower cost. It can also allow for shared purchasing. In turn, stronger credit supply and verification can boost companies’ confidence in meeting climate goals. This may also help attract investors, regulators, and customers.
What This Means Beyond China
If the alliance succeeds, it may influence carbon credit markets beyond China. A reliable mechanism in China for verified credits can:
- attract international buyers seeking high-quality credits,
- set an example for digital verification and collaboration in Asia and other emerging markets,
- encourage more supply from Global South countries by signalling demand, and
- potentially increase cross-border trade in credits as integrity improves.
Given that the global voluntary credit market is expected to grow strongly, improvements in supply, standards, and transparency matter. This initiative may help bridge the gap between compliance systems and voluntary offset markets.
Tencent’s Bold Step Forward
Tencent’s plan to form a carbon credit buyers’ alliance comes at a time when corporate demand for verified credits is rising, and the supply side still faces challenges. With remarkable revenue and financial results, Tencent has the capacity to lead such an initiative.
By pooling demand, supporting verification, and using digital tools, the alliance may help improve supply and market trust. For corporations, this offers a path to more reliable offsets and could serve as a model for boosting high-integrity credits.
How well the alliance deals with the challenges will shape its impact. But as an effort, this marks a meaningful step toward more organized, transparent, and scalable carbon credit markets in China and beyond.
The post Tencent to Form Carbon Credit Buyers’ Alliance: How Could it Transform China’s Carbon Market? appeared first on Carbon Credits.
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