Established over a decade ago, the market for carbon offsets (known as the voluntary carbon market), is undergoing a surge of interest. It is used by firms as a method for offsetting their carbon dioxide emissions by purchasing credits from projects around the world that reduce emissions or remove carbon dioxide from the atmosphere. Projects include wind or solar farms, protecting existing forests or growing new trees.
This report assesses the likely future demand for carbon offsets to 2050 and why the good intentions of 1000s of companies looking to offset their emissions risks being undermined by a surplus of older credits still in the system. The report also proposes mechanisms for how this issue could be managed going forward.