You remember carbon offsets, don’t you? When companies like Dell, Yahoo!, News Corp. and HSBC promised to go carbon neutral, they decided to do so, in part, by financing projects to develop clean energy, or plant trees, or capture methane gas from landfills or farm animals that would, in theory, offset their own emissions. In regulated markets, mostly in Europe, traders bought and sold billions of dollars in carbon credits. Carbon finance was going to be the next big thing.
That was so, well, 2007. These days, you don’t hear much talk about carbon neutral. And the price of carbon credits on regulated markets has collapsed; you can buy a credit, once worth 32 euros (about $42), for about 4.5 euros ($6) these days on the European exchange. Here in the US, cap-and-trade was rejected by Congress. Carbon offsets came under attack, rightly or wrong, as a scam.
So it came as a surprise to me to learn recently that the market for voluntary carbon credits is alive and well and growing, at least by some metrics. A report by a nonprofit called Ecosystem Marketplace put the size of the market at 101 million tons of carbon offsets in 2012, which is up 4 percent over the previous year. In dollar terms, the value of the voluntary offset market fell by 11% to $523 million, as the prices that buyers were willing to pay fell. Even so, a not-insignificant number of companies and individuals are willing to act ahead of governments when it comes to curbing climate change. [click to continue…]