Climate change is one of the most monumental challenges facing our society. Carbon credits were initiated to help funding the transition: Put a price on your remaining carbon emissions and fund projects that reduce the same emissions elsewhere while creating local benefits.
After a short period of exponential growth, project-based carbon markets collapsed in 2023. Now, CoP29 in Baku saw an agreement on the Paris Agreement’s Article 6, which paves the way once again for global carbon markets.
Will carbon credits scale again? What caused the crash? What lessons can we draw?
Looking deeper into carbon credits, you will encounter several “wicked” inherent paradoxes.
Some paradoxes relate to the projects themselves, others to the buyers of carbon credits, and a third category encompasses “societal” paradoxes—issues that not only hinder carbon markets but also appear in broader environmental efforts.
Can we “solve” these paradoxes? No. But we can address them. Some we can tackle with robust regulation. Others, we have to acknowledge and accept – and manage as good as possible.
Yes, previous carbon markets had many flaws. They must learn and improve. But what makes no sense is to ignore these paradoxes while clinging to the illusion that “perfect” projects are just within reach. They are not, and such denial only ensures the controversy will continue to spiral endlessly.
Our hope is that carbonparadox.org will provide a basis for an open and honest conversation among all concerned stakeholders.
The ultimate question is: Should we scale carbon credits and use this instrument to fight climate change, despite their paradoxes? And if not, what realistic alternatives do exist?
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