Let’s say a company has set an ambitious climate goal to drastically reduce their carbon emissions, but in order for them to meet that goal, they would need their supplier two or three links up the chain to clean up their own footprint. If the company has no relationship to this supplier and no influence over how they do business, how does the company get that supplier to reduce their emissions? That’s where Kim Carnahan and the Center for Green Market Activation come in. At GMA, Carnahan is working to decarbonize the hardest to decarbonize sectors including, aviation, maritime, trucking, and cement and concrete. GMA finds companies like the one described above and orchestrates procurement deals on their behalf with decarbonized suppliers. On this episode, she joins host Inder Singh to break down the market-shaping tactics GMA is using to create and accelerate a greener market in the heavy industry and transport sectors. They go over the importance of aggregating demand through buyers’ alliances, how to build trust across buyers and suppliers in a nascent market, and the ways they’re incentivizing suppliers to innovate towards greener technologies. The Market Shapers Podcast is a production of Inder Singh and is produced by University FM. This interview was recorded in June 2025.
Let’s say a company has set an ambitious climate goal to drastically reduce their carbon emissions, but in order for them to meet that goal, they would need their supplier two or three links up the chain to clean up their own footprint. If the company has no relationship to this supplier and no influence over how they do business, how does the company get that supplier to reduce their emissions?
That’s where Kim Carnahan and the Center for Green Market Activation come in. At GMA, Carnahan is working to decarbonize the hardest to decarbonize sectors including, aviation, maritime, trucking, and cement and concrete. GMA finds companies like the one described above and orchestrates procurement deals on their behalf with decarbonized suppliers.
On this episode, she joins host Inder Singh to break down the market-shaping tactics GMA is using to create and accelerate a greener market in the heavy industry and transport sectors. They go over the importance of aggregating demand through buyers’ alliances, how to build trust across buyers and suppliers in a nascent market, and the ways they’re incentivizing suppliers to innovate towards greener technologies.
The Market Shapers Podcast is a production of Inder Singh and is produced by University FM.
This interview was recorded in June 2025.
Climate ambition requires market expertise
Most of the companies that we're working with are trying to decarbonize sectors that they don't actually work in. You know, they're a bank, but they fly a lot. And what they have found is, one, in almost all cases, the bulk of the emissions from the good they are buying don't lie with the supplier they buy it from. They lie three or four steps down the value chain to a supplier they have never met and certainly do not have a contract with. You very quickly faced this problem of influence, which is, does your supplier even have enough influence on the next guy to tell him anything? We had to find a way to connect the buyers with a willingness to pay a premium with the suppliers who actually need to be doing the hard, hard work of decarbonizing heavy industry and transport. You need something like this book and claim system that we design to help the money find its cause, so to speak.
Markets don't shape themselves
26:23: Markets don't shape themselves; it's probably a naive idea that markets shape themselves, but really, behind every functioning market is infrastructure. And that's rules and laws and standards and registries and demand signals like what we're doing, and government policy, various incentives. Somebody had to put all of those in place and maintain them also over time.
Altruism is not going to create green markets
27:02: Altruism is not going to create green markets. We aren't going to have green markets because we should have them, or because the planet needs it. We have to really look at risk and rewards, incentives, influence. That's what makes companies take action. So, use what you've got, where is their influence and where can we drive the creation of green markets.
(Transcripts may contain a few typographical errors due to audio quality during the podcast recording.)
[00:00:00] Inder Singh: Welcome to Market Shapers, a podcast about harnessing capitalism for good. I'm Inder Singh. Over the years, I've had the privilege of working with incredible people, building products, forging deals, and shaping markets that have impacted millions of lives. On this show, I sit down with the leaders, innovators, and behind-the-scenes deal makers who've changed the way markets work, often in ways most people never see. We'll unpack how they did it, what they learned, and how those lessons can help tackle the big challenges ahead.
Kim, thanks for joining us on the Market Shapers Podcast. It's great to have you on.
[00:00:37] Kim Carnahan: Thanks so much for having me.
[00:00:39] Inder Singh: What is the Center for Green Market Activation doing today?
[00:00:42] Kim Carnahan: The Center for Green Market Activation is focused on decarbonizing the hardest to decarbonize sectors, in particular, heavy transport and heavy industry.
So, for transport, that's aviation, maritime, and heavy-duty trucking. Those are the big 18-wheelers you see out on the interstate. And for industry right now we're working on cement and concrete and chemicals and starting to think about steel as well.
The most important aspect of what we do is we go out to the market and we find buyers who are interested in supporting the decarbonization of these sectors. And we aggregate their demand for providing such support. We run collective procurements on their behalf, and then we help them sign contracts for those decarbonized goods and services.
[00:01:28] Inder Singh: Would it be appropriate to call this a buying club in some way, where it sounds to me like you're trying to get companies to sign on to an early adopter approach in these particular fields.
[00:01:39] Kim Carnahan: Yes, definitely. We call them buyers' alliances, kind of, colloquially. And the buyers’ alliance model, it's, kind of, an interesting model in the way we use it, because they're not actually buying the physical good and service.
We use what's called a book and claim system, where you decouple the benefits, the environmental attributes of a good or service from the physical provision of that good or service and separately register it and allow that benefit to be sold separately from the good or service.
The kind of example that some of your listeners may have heard of is renewable energy certificates in the renewable energy market that was originally started because in many, many cases it's very hard to know that the electron that you buy somewhere else is the electron that makes it into your home or into your business.
And so, in a world where it doesn't really matter if that electron is green or is gray, so to speak, they can pay the premium for that green electron through a registry, and then whatever electron makes it into their house is fine. That's the same kind of principle that we work with when it comes to the sectors that we're trying to decarbonize.
[00:02:48] Inder Singh: Essentially, you're trying to catalyze or create a market that hasn't crossed the chasm, for lack of a better term, right? It's still in those early phases and doesn't necessarily have sufficient volumes for this to be a really sustainable market just yet. So, how do you identify those buyers? Like, what are the attributes of those early adopters, and why isn't the market functioning on its own?
[00:03:11] Kim Carnahan: Most of the companies that we're working with are trying to decarbonize sectors that they don't actually work in. You know, they're a bank, but they fly a lot. They're not experts in sustainable aviation fuel. They don't know which fuel they should be supporting out in the market.
So, one of the benefits that we provide to our members is we vet that fuel for them. We actually write guidance that says, ″This is what makes a fuel truly sustainable." And then, we go out and that apply it through our procurement so they don't have to do that vetting process for themselves, for sectors that they are not experts in.
In many cases, there may be very few of these suppliers out there in the world. And so, we're able to go find the very few suppliers, get them to give us proposals, and then vet those proposals. So, even identifying the available supply that is in fact decarbonized is a task that in many cases is far beyond the abilities of the individuals within the companies that we work with. That's just not their day job.
The reason why they're interested in doing this in almost all cases is that they have taken on an incredibly ambitious climate target. We call those supplier emissions Scope 3 emissions.
So, what we have done with the Center for Green Market Activation is take an opportunity that already existed but was being underexploited and work to take as much advantage of it as possible. The opportunity that we saw was this very nerdy sounding thing, the Science-Based Targets initiative, which was originally a group of nonprofit organizations focused on climate advocacy.
They somehow convinced — I think there are over 10,000 companies — to take on these incredibly ambitious targets. I mean, frankly, targets that are so ambitious, most companies when they take them on have absolutely no idea how they're going to meet them. And these targets require year on year over a relatively short time period for companies to be reducing their suppliers' emissions.
Reducing suppliers' emissions, as it turns out, is very challenging. You may have a few top-tier suppliers who you have enough influence on or enough business with to influence their decision-making when it comes to decarbonizing. But for the most part, you won't, which is why they work with us.
And most of these companies are very public-facing. And so, that means most of them are actually not the companies that we're trying to decarbonize within GMA. They're not aviation, and maritime, and trucking, and certainly not steel, and cement, and concrete, and chemicals. There are companies who buy stuff from those companies.
And so, that is a huge opportunity for me because I'm interested in decarbonizing heavy industry and transport. And I was looking for an unlock to decarbonize those sectors. And all of a sudden, I've got a whole bunch of their customers who have raised their hand very publicly and said, ″Oh, we want to decarbonize those sectors." And I'm like, ″Oh, really? Put your money where your mouth is effectively." And I'm joking because a lot of them have been working really, really hard to try to decarbonize their suppliers.
And what they have found is, one, in almost all cases, the bulk of the emissions from the good they are buying don't lie with the supplier they buy it from. They lie three or four steps down the value chain to a supplier they have never met and certainly do not have a contract with. So, all of a sudden, when they started doing the hard work of trying to meet that super ambitious target, they were like, ″Oh, I can't actually meet it by telling that guy to reduce the emissions that he controls." Because he doesn't control most of the emissions.
[00:06:42] Inder Singh: It sounds like you've got a buyer who has an interest in doing something but really doesn't understand which suppliers are actually credible, which approaches are credible, and they're engaging you to figure out, ″Hey, I want to do this, but I just don't know how, and I don't know where to go."
[00:06:58] Kim Carnahan: ″How, where to go, what a reasonable price would be for the thing." And also, they alone don't have the influence to drive the construction of a new low-carbon concrete plant, for example, that may run in the hundreds of millions, if not billions of dollars. Their demand alone is not enough incentive for the supplier to go build that plant.
So, we then, in addition to those other things, are able to aggregate the demand of very large companies that we work with. They are themselves market makers in other instances, but they may not buy enough concrete from this one particular plant to move the needle and get that concrete to a final investment decision.
There is this theory that you're going to be able to cascade a target down a supply chain. And maybe, like, in 100 years, we can, but we can't do it fast enough to solve a climate crisis. So, the idea of cascading the targets down, like you tell your supplier he has to set a target, he tells his supplier, ″You very quickly faced this problem of influence,″ which is, does your supplier even have enough influence on the next guy to tell him anything? Probably not, especially, when it's something as big a deal as, like, decarbonizing cement and concrete. I mean, just from a technological standpoint, it's incredibly challenging. And then for a few customers to go to a cement and concrete company and say, ″You need to decarbonize, you know, they just laugh you out of the room," your tiny, tiny demand from them is not going to move any needle. All these companies have targets, and they're the right companies. They have money, they're public-facing, et cetera. Then we realized they can't actually hit that guy at the end.
How do we do that? And then that's why we had to design the book and claim systems, was because we had to find a way to connect the buyers with a willingness to pay a premium with the suppliers who actually need to be doing the hard, hard work of decarbonizing heavy industry and transport. You need something like this book and claim system that we design to help the money find its cause, so to speak.
[00:08:59] Inder Singh: That's amazing. I mean, it sounds like there was a Herculean effort to create this nascent demand and willingness to pay a premium by major companies, but you are creating the how. You're connecting the dots to make it actually happen and creating the standards, practices, procurement policies that enable that inherent demand to be activated and the market to be created in the first place.
So, I imagine these deals are very complex, and you're trying to build trust on the demand side, with the buyers and on the supply side with the innovators. Both are often taking real risks. How are you building trust as what I might describe as a market orchestrator, right?
[00:09:41] Kim Carnahan: It depends on the supplier that we're talking about, how much risk they're actually taking and working with us. If they are an incumbent supplier of a good or service in one of these sectors, then absolutely, they're taking a risk by decarbonizing because they're at least playing around with the idea of changing their whole business model.
And that to companies that have been around for 20, 50, 100 years, some of the companies we work with, that is a big risk. The way we bring them on board is usually by having success with companies who aren't necessarily those incumbents first. And then they see the success with the new entrance and they think, ″Okay, if those guys can do it, then we can jump into this game as well."
Nevoya is a trucking company we've been talking to a lot lately. They have an amazing business model, really just flipping the whole world of trucking on its head, instead of slowly transitioning some of their fleet from diesel to electric. They are an electric trucking company. Their entire business model is built around making money from electric 18-wheelers. To them, if we can bring that kind of a company a bunch of demand and just put it at their doorstep, that's not a risk, that's a solution to a problem they had, which was finding customers who are willing to pay a premium for a good. And we're, kind of, primed to do it in a particular way. And we've seen that in the fuel space as well with companies like World Energy, who we've done several deals with through our Sustainable Aviation Buyers Alliance. But the incumbents we usually don't see bid on our procurements until the second or third bid, because they want to see that the system is going to work first before they dip their toe in the water.
It's not usually hard to convince suppliers to sign contracts with the companies that we represent. Almost all of the time, our buyers have much better credit ratings than the suppliers they're buying from. So, these are AAA companies who… if they sign a contract and the product is delivered, they're going to pay their bill when it comes due.
But the risk is a little bit more on the buyer's side, just in that they don't know in many cases that the good or service that they're contracting for is actually going to be delivered, just because it may be the first time that this has been produced. It may be the first ever plant that this good or service had been produced from. We have seen delivery delays many, many times with the goods that we work with. So, the buyers have to just believe that, in the end, they're going to be able to get what they're contracted for. They do have an out because they almost never pay before delivery. So, they're not putting money out upfront, in most cases.
[00:12:17] Inder Singh: So, you've got these large AAA-credited big companies that have a commitment to certain climate goals. They're also willing to pay a premium over what they would normally pay with the legacy product because it's more climate-friendly. And you're playing that orchestrator to pull demand across many of these AAA-rated companies because individually, there's not enough buying power to actually move the needle on the supply side. Once you pull demand, you're now representing a larger portion of demand that gets the attention of some of these suppliers.
And you've identified the suppliers, you've vetted them, you believe they're real, and they can deliver on their promises at a reasonable price point. And you're going through the procurement process to identify which suppliers should service this pooled demand. Did I get that right at a high level?
[00:12:59] Kim Carnahan: Yes, that's right.
[00:13:00] Inder Singh: In Global Health, one of the things we did, which I think was a huge risk and actually worked in that instance, whether it works again or not is a big question. But what we were willing to do was pay a cost-plus price. So, in other words, we spent a lot of time understanding the cost structure of the supplier, even if they were a new technology. And we were willing to give them a margin, a margin that made sure it was sustainable on an ongoing basis.
If it's a truly new innovation, a return on investment for the upfront capital deployed for the innovation. But what we learned was those were different cost points for different suppliers. Some of them had more volumes, some of them had less volume, and they were making a margin, let's call it 10% for argument's sake. So, the margin was the same, but the price was different.
And in one experiment, we were willing to pay a second supplier a much higher price in some instances just to keep them in the market. The idea was that, over time, if you could get three suppliers that were competing with each other, they would just continue to compete. They would bring prices down. They would continue to innovate to, sort of, figure out more efficient practices to get their costs down.
In that experiment, it worked. In year one, some suppliers, we paid 30% more than the other suppliers, but by year three, that higher-priced supplier was now competing on price with the original supplier. Have you considered that kind of splitting of procurement, or when would you consider that?
[00:14:27] Kim Carnahan: No. Yeah, I know exactly what you mean. It's very important that I explain that we are price takers. And so, we take whatever prices are given to us, versus telling the suppliers what prices we will pay. We never give an indication, even if, I mean, you could look at the market and, kind of, have an idea of what companies might be willing to pay, but we never say what we're willing to pay or set any kind of price.
They will decide in the end, each for themselves. So, one company may be willing to pay $500 a ton, and the next company may say, ″What? Anything over $200 per ton of CO2 reduces too high." So, really, it's up to each buyer.
But the reason I say that is because it means that we get proposals from suppliers with very different cost structures. We ask them what their pricing structure is. Some of them tell us, some of them don't. Certainly, some of them do cost-plus 20. I've seen that in a number of times.
Some of them have some sort of proprietary reason that they've set a particular price. It really doesn't matter to us, frankly, because we are trying to, as much as possible, commoditize what we're buying, which is benefit to the environment from a particular sector.
And we try to remain as agnostic as possible as long as they meet our basic criteria, then they're just compared based on cost at that point. And like I said, some of our members are willing to pay a higher cost because it is a different technology. Again, it's still a commoditized product, it's like a ton of sustainable aviation fuel. They may say, “Yes, I'm really interested in the emissions benefits associated with this ton of SAF, but I'm also really just particularly interested in SAF made from e-fuels.” We may have enough buyers of that kind to group them together as their own mini buying cohort.
And we are actually doing that right now. We're running an advanced fuels procurement specifically for companies who are interested in that kind of fuel. And as it so happens, willing to pay even more of a premium.
[00:16:20] Inder Singh: Well, let's double click on that a little bit. Let's say that you've worked with three suppliers of these new technologies that are climate forward, that need to be purchased at a premium, because we're still talking about lower volumes. They haven't gone down the cost curve just yet. But let's say that there's only one supplier selected. Does that mean that the other suppliers in this market won't have sufficient demand to cross that valley of death? Are you worried about other hungry suppliers that, potentially, four years, five years, six years down the line could be cost-effective suppliers no longer have a pathway to growing to sufficient volumes?
[00:16:59] Kim Carnahan: Our system is a rinse and repeat system. And so, we're not leaving any suppliers out because we're either running a procurement every year, because we also have new members join. So, we run a procurement last year and maybe all of our members at that point satiated their demand for the next three years.
But then we have doubled our membership between last year and this year. And so, if we're going to need to run it again in order to meet their demand for the next few years. Our process is ongoing and our demand is only growing. There is no scenario in any of the sectors that we've run procurements on so far that we're going to run into that problem. Now, you could run into that problem if you truly represented all of the demand, meaning you had captured it all and you were only going to run one procurement for the next 20 years, then absolutely, you would be doing that. But that is nothing like the situation that we're involved in.
[00:17:51] Inder Singh: It sounds like the buying club is expanding significantly each year.
[00:17:54] Kim Carnahan: As are the suppliers, and thank goodness because there weren't enough when we started, and finally, we're seeing the suppliers get off their feet as well.
[00:18:02] Inder Singh: Are there any other examples that you want to bring up of the work that the Center for Green Market Activation is doing that provide really illustrative teaching points for anyone else thinking about shaping markets or catalyzing new market creation?
[00:18:17] Kim Carnahan: Yeah, I haven't given very many examples from the cement and concrete sector, which is one of the programs that we're right in the middle of developing right now. Cement and concrete is not very sexy. It is not something that most people know anything about. In fact, I did not know the difference between cement and concrete before I started working on cement and concrete.
But it is 8% of global GHG emissions, and that's huge when you think about, you know, aviation and maritime are about half of that — less than half of that, actually. So, it's a huge emitter with a really different type of emission problem to solve than in many other sectors.
Emissions are just going to happen as a result of making the cement if you don't change the process entirely. And so, that's CCS.
[00:19:05] Inder Singh: And CCS is carbon capture and storage.
[00:19:10] Kim Carnahan: Right. So, then you have a lot of interest. And the incumbent producers doing CCS projects, which is definitely something that all studies you see now about decarbonizing the sector, say, need to happen. We need CCS in the cement and concrete space.
But we also have a lot of interest in new technologies that just remove all or part of those process emissions that would require CCS. And those companies are really, really cool to work with, who are looking at new chemistries. When you talk to these young inventors about their technologies, it is really infectious. You know, you see companies, the kind of customers that we work with, getting excited by those kinds of technologies and wanting to invest in them.
And the interesting thing about these inventors is they have a vision, they have a path to see the cost come down relatively quickly and to eventually be at cost parity with traditional incumbent technologies, even though it is a game-changing technology.
We're as excited about the CCS projects as we are about the new tech. We both to decarbonize the cement and concrete sector. But it is very helpful when you're talking to the buyers that we represent to get them excited about the technology. And when we can talk about the way in which these young inventors are changing the game, and cement and concrete for just a second, cement and concrete is sexy.
[00:20:38] Inder Singh: I wonder what would happen if you could broker a volume guarantee or forward price that enabled new tech to be at cost parity or lower than legacy tech, I would imagine the demand would shoot out the roof instantaneously. Do you agree?
[00:20:54] Kim Carnahan: Agree. Yeah.
[00:20:55] Inder Singh: There's a number of established players in the global health space that have been more recently doing volume guarantees, like Gates Foundation, backstops hundreds of millions of dollars.
If you had an agreement that backstop, whatever it was, X million units of product Y that is only paid if those volumes are not realized in a volume guarantee situation, like there might be a total outlay of $10 billion for a particular technology. But the only time that whatever backstop financing agency is paying, is if the volumes are not met. So, their actual expected value calculation of the value guarantees is way lower than $10 billion. It might be 500 over the period of three years, right?
[00:21:36] Kim Carnahan: Mm-hmm.
[00:21:36] Inder Singh: I wonder whether a volume guarantee might help you forward price with a supplier to enable demand to shoot out the roof.
[00:21:45] Kim Carnahan: I agree. The applicability of that idea to each of the sectors we work on would be different. It is the most applicable in the cement and concrete space, for sure. However, we are not yet at the point where we know which technology to bet on.
And so, applying that type of a solution to this sector, my guess is we'll come in five to 10 years. Like, five years if I do my job well enough and we get several of these new plants using different technologies up and running, and we can test them, and then 10 years if we don't see that happening fast enough and we have slower uptake.
But absolutely, I think the critical point of what you're saying is you have to have a clear vision and know maybe not exactly how you're going to get to cost parity, but have ideally a number of paths to cost parity, because some of them will fail, right? The problem we have in aviation is, if I'm being honest, we don't really have a path to cost parity for sustainable aviation fuel right now. That doesn't involve a pretty heavy cost on carbon, which would help a lot. But I'm not these days counting on any particular regulation.
All the systems that we built are built so that they can work regardless of whether or not they have government support.
[00:22:53] Inder Singh: Kim, so this is amazing work. You're catalyzing the creation of climate markets across very heavy industry sectors. Looking back, what's one thing you wish more people understood about market creation or how shaping markets really works that you'd want to articulate?
[00:23:14] Kim Carnahan: It's probably what this entire podcast is about, really. But markets don't shape themselves. There's this really, kind of… I don't want to say naive, but among some, it's probably a naive idea that markets shape themselves, but really, behind every functioning market is infrastructure.
And you know, that's rules and laws and standards and registries and demand signals like what we're doing and government policy, various incentives, either government incentives or the incentives that I mentioned from these target-setting organizations. Somebody had to put all of those in place and maintain them also over time.
That would be really helpful if more folks understood that, maybe the second one, and this is more for my climate friends who really believe that everyone should just do the right thing. But altruism is not going to create green markets. We aren't going to have green markets because we should have them, or because the planet needs it.
We have to really look at risk and rewards, incentives, influence. That's what makes companies take action. So, use what you've got, where is their influence and where can we drive the creation of green markets versus just thinking companies should be buying lower carbon goods and services.
You'd be surprised how often I talk to old friends from the climate space who really still just say, ″Why should we make this work for companies? They should just be doing the right thing." The Center for Green Market activation, our whole goal is to make it easier for companies to spend their money on the game-changing solutions, the climate so desperately needs, but we absolutely are trying to make it easy. We're trying to take all of the work and as much of the risk out of that as possible for the companies that we work with.
[00:24:56] Inder Singh: Yeah, I often wrestle with my economist friends who say, ″Let's markets function by themselves," you know. And I'm like, ″I agree that markets function well by themselves in many cases, but you know, you're talking about challenges where we've shown that if you can structure the system a little bit differently, you can massively accelerate the deployment of innovations that can bring very great benefits to society.”
Kim, it was a real pleasure speaking with you today. I appreciate it.
[00:25:24] Kim Carnahan: Thank you so much.
[00:25:29] Inder Singh: Thanks for listening to the Market Shapers Podcast. I'm Inder Singh. If you enjoyed the show, please like it, or leave us a review and subscribe in your favorite app, so you don't miss the next episode. Market Shapers is produced by me with help from University FM. Special thanks to Renaissance Philanthropy, Griffin Catalyst, and the Digital Harbor Foundation for their support.