Thursday, July 14, 2016

Average price for carbon offsets looks like a good deal for companies trying to reduce their climate risk

A new report by Forest Trends’ Ecosystem Marketplace “Buying in: Taking Stock of the Role of Carbon Offsets in Corporate Carbon Strategies” found that companies buy carbon offsets to accelerate their deep economic transformation, rather than just to create a good environmental reputation.
Out of 1,896 companies who publicly disclosed data to CDP (formerly Carbon Disclosure Project) last year, 248 invested in projects to reduce climate-changing emissions outside of their immediate operations, purchasing the equivalent of 39.8 million tonnes of carbon dioxide in 2014. Aside from offsetting, 435 companies now assign an internal carbon price and another 538 have plans to do so in the next couple of years, indicating that businesses are starting to quantify climate risk and factor it into their operational budgets. The carbon price companies assigned ranged widely, but the median value of US$18/tonne makes the average price for offsets on the voluntary market (US$3.3/tonne) look like a good deal for many companies looking to reduce their climate risk.