carbonparadox.org

How wonderful that we have met with a paradox. 

Now we have some hope of making progress. (Niels Bohr)

Day 12: Voluntary Paradox

—

in

Imagine you donate $100 to a charity. Instead of sending a “thank you” card,  the charity replies: “Why didn’t you give $200?” This is the essence of the voluntary paradox.

Some companies voluntarily adopt climate initiatives that exceed regulatory requirements, driven by a commitment to environmental responsibility. 

Paradoxically, these efforts often attract criticism for not going even further. Meanwhile, companies that take no voluntary climate action steps tend to fly below the radar and avoid criticism.

Being criticized for not doing even more can discourage companies, leading them to scale back their voluntary efforts rather than scaling up.

How can we strike the delicate balance between holding companies accountable for blatant greenwashing while encouraging those who have voluntarily engaged in climate action, even if their efforts are not yet perfect?

Comments

2 responses to “Day 12: Voluntary Paradox”

  1. Michael Eder Avatar
    Michael Eder

    I believe this is the root problem of the VCM. It’s already in the name… it is VOLUNTARY.

    you, me and everyone within the sustainability bubble offsetting their emissions is nice and laudable. But let’s face it, the large majority of society does not participate in voluntary offsetting. The consequence is that this market is not scaling to reach real significance to help close the climate finance gap.
    I also believe that retiring carbon credits against a claim, be it neutrality or other marketing message, creates a false incentive to buy as cheap as possible. Let’s face it, if you let a CFO choose which carbon credit to buy, she will always choose the cheapest credit to back up the company’s claim.

    This is why there’s voices in academia and science arguing to use carbon credits in a different way. Carbon credits are tradable. They are scarce and not easy to ‘create’. We all (hopefully) agree that they are valuable. But they don’t have other real life value. All those attributes also apply to gold. Until the 1970s we used to base our money supply on gold. Why not re-invent money and make it serve our needs as society in the 21st century? #carbonismoney

    By coupling our money supply with carbon mitigation assets we finally have a structural way to finance carbon reducing/avoiding activities. Channeling significant amounts of money to climate protecting activities. We would finally get rid off the voluntariness dilemma.

    Reply
  2. Thomas Krabbe Avatar
    Thomas Krabbe

    Isn’t the root cause of this paradox that bad credits were sold as good ones? If so, there is a big opportunity to bring back trust into the VCM by making good rating, pricing and risk management tools available. Similar to what big corporations are using to manage their currency, debt, inventory and other financial risks.

    IMHO, voluntary should not only be for philanthropic, marketing, or virtue signalling purposes only. Participants with those motivations are welcome to join the VCM of course, but its real purposes should be broader, shouldn’t it?

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *