Ecosystem Marketplace has been tracking the carbon markets for over a decade, and this new report complements this research with a deep-dive into the demand side of carbon offsetting. Using companies' public disclosures to CDP, we are able to look into the "who's who" of offsetting and understand how purchasing or originating carbon offsets fits into companies' larger emissions reductions strategies.
This report takes a deep dive into the how and why of offsetting and sends some strong and important signals for climate and forests. Here are some of the report's key findings:
Offsetting is buying your way into the problem – not out of it. Companies engaged in offset-inclusive carbon management implemented emissions reductions measures at a higher rate compared to companies that did not include offsetting in their strategy. Collectively, the 314 CDP disclosers engaged in offsetting spent $42 billion on direct emissions reductions in 2014 – more than the $41 billion spent by the much greater number of companies (1,522) that did not purchase or originate offsets.
Of the companies reporting to CDP, 435 companies have now implemented an internal price on carbon, and 583 said they plan to implement one within the next two years. Compared to the median internal carbon price reported by companies – $18/tonne – current offset prices may be considered a deal (voluntary offsets averaged $3.3/tonne last year). Offset buyers were nearly five times as likely to internally price carbon compared to other companies, reflecting their more acute perception of climate change risks.
Most of the offset buyers come from the finance sector, where one in five firms voluntarily purchased offsets; top buyers in this category included JPMorgan Chase & Co, Deutsche Bank, and Credit Suisse.