Voluntary carbon markets are an important tool in the fight against climate change, but several issues make them less effective. Carbon offsets often overstate emissions reductions, and firms use these as a cheaper alternative to investing in real, tangible emissions reductions in their own supply chains. Ram Smaran Suresh Kumar summarises the key issues with these markets and outlines important reforms they need.
Confronting climate change requires significant investment. The IMF estimates that achieving net zero by 2050 requires low-carbon investments to rise from $900 billion in 2020 to $5 trillion annually by 2030. Of these, emerging markets and developing economies will need $2 trillion annually, a fivefold increase from 2020. Voluntary carbon markets are a useful tool to channel private climate finance, particularly to these countries.
Ram Smaran Suresh Kumar
18 October 2024
LSE Business Review
https://blogs.lse.ac.uk/businessreview/2024/10/18/voluntary-carbon-markets-are-helpful-but-far-from-perfect/
This work is published under POID and the CEP's Growth programme.