28. The Competition paradox

Jun 17 2025 · 2 min read

Carbon · Carbon Market · Sustainable Business

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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.