Why are organizations like FIFA, companies like Disney, and governments like Brazil all interested in carbon credits?
By Sunny Trinh
This summer has been the hottest in history, with the Earth reaching its warmest June temperatures on record. And that was before July became the hottest month ever recorded, with the global mean surface air temperature during the first 23 days coming in at 16.95ºC.
At a time when it feels like a breaking point for climate change, it can seem like there’s not enough time to transition to a net-zero world by 2050, a goal that many organizations continue to target. But climate offsets—and both technology and nature-based solutions—have offered a necessary bridge for these large corporations that continue to create greenhouse gas emissions during their normal operations because they lack immediate, viable alternatives.
So why exactly are organizations like FIFA, companies like Disney, and governments like Brazil all interested in carbon credits?
Climate change affects every person and every organization on Earth, but not necessarily in the same way, which means that the answer to this question varies. An organization like FIFA chose to buy carbon credits to counteract the estimated 3.6 million tonnes of CO2 that their World Cup event would generate. By buying high-quality carbon credits, Disney addresses emissions such as the estimated 16.6 million tonnes of carbon annually produced from parks. Brazil, on the other hand, aims to generate billions of dollars through its sale of carbon credits and use those funds to protect its Amazon rainforest.
The basic foundation of these credits is the same, and in the case of Brazil, carbon credits demonstrate the impact that transitioning to a sustainable future can have. Other governments will follow suit when it’s clear they can generate revenue by reducing deforestation instead of promoting logging, agriculture, and mining industries.
Arguments against using carbon credits have recently been published because they focus on offsetting emissions instead of reducing them. From this perspective, they would indeed make no long-term difference. But carbon credits must be considered a transition tool to enable societal change. They can close the financial gap for companies or bring in revenue for governments by reducing deforestation.
It’s also essential to recognize that not all carbon credits are created equally. The Carbon Offset Guide says there are five crucial elements of carbon offsets:
- Additionality (GHG reduction that would not have occurred without the project).
- Avoiding overestimation in reporting.
- Permanence in the project.
- A sole company is laying claim to the credits.
- Avoiding other social or environmental harms in the process.
Elements like additionality or avoiding other social harms may seem complicated to measure before the project, but if companies focus on transparency, accurate quantitative measurements, and also meet recognized criteria like the Core Carbon Principles or the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), then preventing greenwashing becomes straightforward.
Carbon credits are still a novel idea, and although they’ve been around since the 1997 UN Kyoto Protocol, they’ve become more popular in the past decade. Engaging with experts can make the process easier for organizations like FIFA or companies like Disney to invest in high-quality projects and offsets.
A company like GHG Accounting can combine environmental management expertise, scientific rigor, and accounting proficiency with technology to support the development and implementation of projects, while companies like DevvStream focus on technology-based projects to reduce emissions.
It’s up to companies, and the individuals who operate them, to reduce the emissions of the largest organizations in the world to prevent and avoid unnecessary destruction in the future. As humans, we must reach net-zero emissions by 2050 to avert disaster.