Morgan Stanley Sees Tipping Point in CO2 Credits as Prices Sink

The market for carbon offsets is approaching a “material tipping point” following months of bad news that’s spooked investors, according to an analysis by Morgan Stanley.

The voluntary carbon market (VCM) has been gripped by a steady stream of scandals, leading to wild price swings and even collapsing valuations. That has implications for firms trading such credits, which have been saddled with vast piles of stranded assets, as well as for the companies using them to underpin green claims to customers and regulators.

“Price action in the voluntary carbon markets in 2023 reflects heightened concerns about project quality and ...