The voluntary carbon market opened in the late 2000’s and includes all transactions of carbon offsets, which represent the reduction, avoidance, or sequestration of carbon dioxide or an equivalent greenhouse gas emission and are typically measured in metric tons.
Carbon offset purchasing is an open market and buyers range from individuals or companies striving to be climate conscious to emitters who face regulations to either reduce their emissions or purchase offsets. Carbon offsets can take many forms but must meet the four basic standards of being real, additional, measurable, and verifiable. For the last ten years carbon offsets have supported various projects such as improving energy efficiency, improving public and alternative transportation, reducing emissions by modifying industrial, agricultural, and waste disposal processes, installing renewable energy systems, and avoiding carbon emissions through forestry and land use changes. The categories with the most issued offsets from 2008 to 2018 were energy efficiency and fuel switching projects and renewable energy projects, with 633 and 611 projects respectively. The project with the next most issued offsets was waste disposal with 238, which stands to underscore how cost-effective and desirable the energy efficiency and renewable energy projects are.
From 2005 to 2017 over 437.1 metric tons of Carbon Dioxide emissions (MtCO2e) have been reduced, sequestered, or avoided through the market, the equivalent of not consuming over one billion barrels of oil. That number might seem not meaningful given the time frame, but this highly flexible market has huge potential. Some of that potential has started to show, as this report from Forest Trends on Voluntary Carbon Market Insights: 2018 Outlook and First-Quarter Trends details. Forest Trends found that in 2017, projects issued a record high of 62.7 MtCO2e in offsets, which is equivalent of not consuming almost 150 million barrels of oil. The 2017 trend of increased purchasing has continued in 2018, with 42.8 MtCO2e already retired in the first quarter of 2018.
Despite the record highs in 2017 and 2018 the future of the voluntary carbon market is uncertain, largely because of the Paris Agreement and the upcoming cap-and-trade program from the aviation industry, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Experts are divided as to whether the Paris Agreement and CORSIA will have a positive impact on the voluntary carbon market or whether the activity driven by these two programs will happen largely outside of this market. Regardless of the uncertain future for the voluntary market, both the Paris Agreement and CORSIA will certainly have a positive impact on the health of our planet and mitigation of climate change.
Finally, it is worth noting that while carbon offsets are a useful tool to encourage sustainably focused projects, the best way to reduce your personal carbon footprint is to reduce your own emissions and become more energy efficient.
To read more about the Voluntary Carbon Market research done by Forest Trends please visit their website.