Return to The paradox of carbon credits
Move to 6. The Offset paradox <> Move to 8. The Ambitions paradox

A project can only earn carbon credits if considered “additional.” This means that carbon finance made the project possible (although that doesn’t necessarily mean it paid for every element of the project). 

Carbon finance can de-risk speculative investments in some cases, while in others, it is used to jump-start new activities that will become profitable over time. In very few cases, it pays for an activity, such as industrial carbon capture and storage, that wouldn’t exist if not for carbon finance. 

Here is the paradox: The most efficient, impactful projects—those that bring significant benefits to local communities—often face the highest risk of not qualifying as “additional.” 

Conversely, the projects deemed most “additional” frequently lack a business case and remain fully dependent on ongoing carbon credit funding to stay viable. 

This is one of the most fundamental paradoxes of carbon credits–what’s your view?

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 24 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.