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Return to The paradox of carbon credits
Move to 25. The Intentions paradox
From smartphones to electric vehicles to new social media platforms, success is measured by profitability. Once a product or service becomes commercially viable, it scales. At every sustainability conference, you'll hear the same mantra, chanted like a sacred verse: sustainability must make commercial sense, or it won’t scale. Similarly, society celebrates bold investors who take risks on early-stage startups and emerging technologies, reaping substantial rewards when their bets pay off.
Carbon credits seem to follow a different set of rules. Turning a profit in this space is often met with scepticism—if not outright criticism. Carbon credits are expected to "do good"—help mitigate climate change and support local communities. Yet, once a project becomes commercially viable and de-risked, investors may find themselves accused of “profiteering.”
This creates a paradox: struggling, unprofitable projects that depend on donations are perceived as “good,” while successful, scalable business models are dismissed as “bad apples.”
This bizarre mindset discourages investment and risk-taking, ultimately ensuring that the carbon credit market remains a patchwork of fragmented, tax-funded pilot projects—forever scraping by on the goodwill of governments and philanthropists. Meanwhile, the entrepreneurs and risk-takers who could inject the fuel of capital and scale up real solutions are left tiptoeing around an industry that seems unsure whether it wants to succeed or just bask in the glow of moral superiority.
In this series, two leading authorities in carbon uncover the secrets and contradictions of an entire industry – in the most fun and engaging way. Through 32 curated Carbon Paradoxes, you'll learn everything essential about this field, starting with the tensions we must address to make environmental markets thrive.
This article is also published on carbonparadox.org. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.
