Sumatran elephant in South Sumatra, Indonesia. Photo by Rhett A. Butler
The voluntary carbon offset market reached a three-year high in 2011, according to the State of the Voluntary Carbon Markets report released this week.
Volume hit $576 million in 2011, trailing only 2008 when $776 million in voluntary carbon credits where traded. Two-thirds of 2011’s buying was done by corporations seeking to voluntarily “offset” their emissions for corporate social responsibility programs and marketing purposes.
“The markets’ increase in value points to a continued demand, especially on the corporate front, for voluntarily offsetting emissions,” said Katherine Hamilton, Director of Forest Trends’ Ecosystem Marketplace initiative. “Some of our more interesting findings, however, are in the composition of the market, which continues to develop new dimensions on both the supply and demand fronts.”
For example, the report noted that the U.S. emerged as the largest market for voluntary carbon credits despite lacking a regulatory framework for carbon emissions.
“US buying is coming from corporate commitments to grow the marketplace based on their desire to make a domestic impact,” said Ecosystem Marketplace Carbon Program Manager Molly Peters-Stanley.
The report documented a jump in offsets generated by wind farms and clean cookstoves in 2011. Forestry however remained the biggest single source of offsets.
State of the Voluntary Carbon Markets is published each year by Ecosystem Marketplace, a portal run by Forest Trends. Ecosystem Marketplace focuses on emerging markets for environmental services, including biodiversity, water, and carbon. Ecosystem services markets operate on the premise that placing a value on services afforded by forests, wetlands, and other ecosystems will foster their protection. The proposed REDD+ program, which aims to reduce emissions from deforestation and forest degradation, could eventually form the basis of a market for forest carbon.
Critics of offset markets argue that some types of offsets don’t actually reduce greenhouse gas emissions by allowing polluters to continue emitting, but supporters say such markets generate revenue to support low carbon development and avoid future emissions.