Group of dairy cows
Carbon Credits
Carbon Credits

The power of markets

I believe in the power of markets. Markets create incentives, and incentives change the way we behave. As my colleague Scott Eidson recently wrote, that’s why we we are excited to combine the market power of 3Degrees and Origin Climate into a single force for environmental change that creates economic prosperity and drives meaningful emissions reductions to tackle global climate change.

Having spent my early career in finance and in business school in New York City, I like to say I was “raised by capitalists.” But unlike many of those capitalists, my primary goal would become harnessing the power of markets for positive change rather than for self-gain.

Critics of market mechanisms like to focus on the element of self-gain. Money, an intrinsic part of most markets, is the “root of all evil,” they say. But it is the love of money that is the root of evil, not money itself. Money is just a mechanism used to store value, just like markets are simply mechanisms that help solve problems efficiently by allocating resources to where they are most effective.

Making markets work for the environment

And this is the aim of our environmental markets work at 3Degrees. Our customers understand that pollution has a real cost and that markets offer a real solution. In 2016 alone, our combined customer base channeled nearly $40 million into these markets, helping to fund the operating costs of over 400 renewable energy and other emission reduction projects—and hundreds of jobs—across the United States. And this doesn’t even count the $1+ billion in financial commitments our consulting clients have made directly to projects over the last couple years.

And our numbers are growing. Both 3Degrees and Origin Climate have grown steadily over the last three years as more buyers enter or increase their participation in this market. The combination of our firms will further accelerate this, as together we are equipped to provide a broader range of products that funnel cash into projects that literally change the world.

<img=””>Dairy cow at a dairy digester

Turning waste into energy (and carbon offsets)

I have seen this change firsthand. For example, we work with more than a dozen family-owned dairy farms that, prior to having access to environmental markets, vented methane gas from livestock manure into the atmosphere while buying electricity from a grid powered by fossil fuels. Since the advent of products like renewable energy certificates (RECs) and carbon credits, these farms have been able to install technology that captures this methane and use it to generate their own electricity. It also reduces odor and groundwater pollution at the same time. So in the end what these markets are achieving is nothing short of transformation of entire industries.

There are many examples of this kind of industrial transformation. An environmental market that efficiently channels funding to projects like this and thus serves as an agent of change simply makes sense. Just like conservation of natural resources makes sense. In a world that sometimes feels devoid of common sense, this comes as a welcome sigh of relief.

More on 3Degrees + Carbon Markets

Originally published on  LinkedIn