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Offset PricingWhy are our offset prices so much lower than everyone else?We get asked that question almost every day. Once you demystify how offsets are created and sold, the answer is simple. First of all, carbon offsets are a commodity, which are traded all over the world. In the U.S., offset prices are driven primarily by the Chicago Climate Exchange (CCX), which trades 90% of all offsets. Subsequently, the CCX trading price influences the entire market. The CCX has two markets: |
Currently, in the United States, the price of offsets are very low, mainly because there is no federal climate change legislation in place. Market prices between MTM and OTC markets are different. OTC prices are higher because buyers are willing to pay more for specific projects that have a lot of side benefits. It’s important to note that MTM offsets hit a high of $7.50 a metric ton in 2008. Many offset providers thought that prices would continue to climb. Verus Carbon Neutral realized that the market was going to continue to fluctuate. Unlike other offset providers, we decided to not use a fixed price, but instead change our offset prices according to OTC average prices. As a result, we are able to offer the public the lowest priced offsets in the world. Projects that have a great deal of humanitarian benefits can and do command much higher prices. For example, one of our featured projects, Andhyodaya, empowers girls by enabling them to go to school, because without the project they would instead be out collecting wood. The Andhyodaya Biogas Project is priced at $4.00 a metric ton. Currently our featured projects consist of methane capture, biomass renewable energy and sustainable forestry. Verus, however, has access to hundreds of offset projects around the world. Prices may be slightly higher for special requests. Our prices start at $2.75 a metric ton. |
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