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I work in an adjacent space, and have been encouraged by an investor to push into the reduced emissions and avoided emissions sector. I’m yet to decide, but a f
by Biologist123 5y ago
I work in an adjacent space, and have been encouraged by an investor to push into the reduced emissions and avoided emissions sector. I’m yet to decide, but a few factors are currently dissuading me:
1. The assumptions behind forestry and soil offsets on closer inspection can seem a bit stretched.
2. An offset creates revenue for the person creating the offsets - which money is then spent on things which have their own carbon intensity - eg fuel or a vehicle or whatever. So there’s ultimately no offset.
3. Being able to offset your carbon emissions has unpredictable consequences. I remember seeing some study which showed people who bought a Macdonald’s salad were likely to reward themselves with a burger. I can see how I’d offset a flight and then piously reward myself with a steak later.
4. Companies buying offsets open themselves to reputational risk associated with the quality of the offsets. Is it worth the risk?
There seem to be a bunch of other reasons why offsets are questionable but those are my four reasons for not going into this space.
[Edit: I added reason 4].
- contingencies 5y agoI looked relatively deeply in to this area when starting an asset exchange ~2011. My conclusion at that time was that existing carbon trading / offsets tokens were basically non-fungible due to disparate definitions from different regulators. Nominal assets ranged from honor-system self-declarations to heavily audited. The resulting asset types were found to be effectively illiquid, despite a rush to open exchange platforms and media talk of trading schemes, owing to lack of buy-side demand. Individually the systems were mostly only useful for gaming local regulators. I doubt their primary purpose today has changed from multinationals greenwashing their dirty operations with suitably distracting levels of misdirection.
- iav 5y agoCalifornia and Quebec carbon allowances markets are now linked (trading as CCA), and Washington State is expected to join. I researched that market thoroughly and it’s not perfect but very well structured. It’s mostly carbon allowances, not offsets (offsets don’t really reduce total emissions). CCAs trade on the ICE exchange and there are regular scheduled auctions. Arguably more liquid than most stocks.
- Biologist123 5y agoTradable allowances are a good idea leading to lower cost in carbon emissions reductions.
- Biologist123 5y agoAt about that time I came into contact with a carbon offsets brokerage which European royalty had backed. I wondered if what they were actually selling was the opportunity to rub shoulders and network with some big hitters. That company was sold for a lot of money before the carbon market crashed last time for a range of reasons which I don’t think have been resolved.
- moralestapia 5y ago>[...] for a range of reasons which I don’t think have been resolved Care to elaborate? I'm very interested in this. Thanks.
- Biologist123 5y ago1. The science is - believe it or not - unsettled. Take this on soil carbon sequestration: https://www.quantamagazine.org/a-soil-science-revolution-upends-plans-to-fight-climate-change-20210727/ https://www.quantamagazine.org/a-soil-science-revolution-upe... 2. Leakage seems inescapable both physical and in an economic sense as I described above. 3. Because the market is voluntary, it’s extremely vulnerable to cost-cutting. I’d say those are the three main issues which have not been resolved since last time.