A Carbon Canvas

ART MARKETS VS CARBON CREDITS - WHAT’S THE CONNECTION?

While seemingly disconnected, the world of art and nature is inextricably linked. Since time immemorial, artists have drawn inspiration from nature, have recused themselves in remote natural anchors, and yet we are yet to see how they really connect to a parallel world which seemingly floats on another universe from what it means for art per se. From Van Gogh to Monet, all the greats have found a unique calling in the earth’s offerings.

There are however, some serious parallels between the two worlds which are issues to contend with - one can seemingly draw lessons from the art world for the impending explosion of carbon markets as the international community embraces the foundational set up and overarching frameworks to prepare for what is touted as the next big thing to hit financial markets after the Crypto ETFs. Creating a market based on informed risk-taking - taking a bet on something that would work.

Carbon Market Auctions & Art Auctions

Auctions have always seemed like an unfair way to sell valuable works of art, especially in vacuums of power and ownership which most people cannot take part in (or afford to participate in). Washington state has raised an estimated $1.8 billion through the sale of allowances to polluting businesses at carbon auctions this year.

Establishing provenance in art - using MRV systems for integrity

The key in establishing the right “price” for any painting or artwork is in establishing provenance - where does the piece come from, what is its value, can we know for sure the artist indeed produced this piece? Similarly, integrity in the monitoring, reporting, and verification of carbon dioxide emissions and reductions is key. The markets cannot exist without reliable information feeding the exchange.

Beauty (or value) lies in the eye of the beholder (buyer)

Art like nature, provides wide societal benefits which are not limited to single individuals or corporations or organizations. It is crucial that many classic artworks reside in museums for universal public access for the wider audience to appreciate and view. Similarly, the benefits to be gained from the natural world are also crucial to the society at large. The Amazon is famously referred to as “the lungs of the world.” Protecting and preserving such assets is a communal responsibility. There are wider co-benefits from such activities - if we value cultural longevity through the preservation of important artworks which we deem to have a role to play in establishing our humanity, there are even more co-benefits from establishing protective measures for nature through carbon markets, particularly in voluntary ones. 

Impending inequity in those who can access the markets

Art markets are notoriously elitist, with access limited in the hands of those who (a) have serious disposable income to spend on pieces which are valuable to society at large, and (b) take place in rooms that most of us do not have invitations to. Similarly, trading in carbon markets at present lies in the selective hands of exchanges located where regulations have advanced notably the EU. This also creates a massive gap in the supply and demand - where does the capital come from, and where are the projects located. And finally, launches the key inequity question of - do carbon markets facilitate the shift of blame? If one can pay for it, do their emissions disappear?