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Return to The paradox of carbon credits
Move to 27. The Entropy paradox
Healthy competition is a powerful driver of market growth. When multiple players compete for market share, they are incentivized to innovate, improve product quality, lower prices, and enhance customer experience—ultimately benefiting consumers and stimulating demand. Moreover, competition pushes companies to explore and serve previously overlooked market segments, expanding the market as a whole.
Paradoxically, the carbon market behaves differently. Here, competition often undermines the market instead of strengthening it. Rather than focusing on promoting the strengths of their own solutions, many actors engage in public criticism of competing approaches—accusing others of poor quality, weak integrity, limited permanence, or flawed scientific foundations. This internal fragmentation fuels a negative narrative that plays directly into the hands of carbon market skeptics. Opponents of the entire system are handed a menu of arguments—generated from within the industry itself—to discredit carbon markets as a whole.
Some of the most prominent infighting occurring within the fragmented carbon market:
- Reduction versus removal credits
- Engineered removals versus nature-based removals
- Permanent versus shorter-term removals
- Domestic versus international projects
- For-profit versus not-for-profit schemes
- Industrial projects versus community-based projects
- Voluntary markets versus UN-backed markets
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.
