A non-profit program to combat climate change

Limits of voluntary offsetting

We have experienced that the emerging Carbon Market has been over flooded with large companies and private entities pretending to make economical profits from financing emission reduction projects. The idea behind this might not be entirely inappropriate due to the fact that it provides economic incentives to speed-up the transition to a low-carbon economy. Nevertheless, because of this profit approach several projects in poor countries with high sustainable development criteria face significant barriers to access Carbon Finance.

Problems do exist within the CDM, which has proven to be a slow and complicated mechanism. The complex CDM procedures are one of the main barriers project developers face. These shortcomings are partially due to the fact that, in the design of this mechanism, the lack of skilled workforce in developing countries has been overseen and remains unaddressed.

The Voluntary Carbon Market evolved tapping some opportunities the CDM failed to address. The Voluntary Carbon Market started taking care of high sustainable development related projects that could not see any light coming from the CDM (e.g. non-renewable biomass and forestry projects). It provided financial assistance in a simple and flexible way. Because of this, several project developers in the South have preferred to consider this option instead of the CDM. But these characteristics represent also the Voluntary Market’s major weaknesses. Therefore it has been criticized for its lack of standards, cast-iron quality assurance and transparency. Hence, over a dozen of voluntary offset standards have been launched in the past years.

Each standard focuses on a somewhat different target and none has managed to be recognized as the industry standard. Some try to mimic the CDM whereas others intend to provide a less rigid method to reduce transaction costs and enable as many credits as possible to enter the market (Kollmuss, A. et al., SEI and Ticorona, 2008). It must be bear in mind that all standards raise the project costs and their guidelines are not as “friendly” as they were expected to be. These aspects trouble project developers in the South who are now tripping with the same rock that the CDM dropped through its path.

Furthermore, the report “State of the Voluntary Carbon Markets 2007: Picking up Steam” published in 2008 by Ecosystem Marketplace and New Carbon Finance mentions that buyers of voluntary credits tend to purchase offsets that most closely resemble those of the compliance market rather than indulge in the sort of experimentation and innovation that many believe the markets offer.

Innovative projects for the climate

In May 2008, scientists at the Mauna Loa Observatory in Hawaii declared that there are now 387 parts per million (ppm) of CO2 in the air, the highest level for 650 000 years. The most recent figures indicate that last year the rise was approximately 2.14 ppm. It has been suggested that in the upcoming years the increment will be higher.

Therefore we will reach the so-called tipping point of 400 ppm before 2014. This will bring more extreme weather patterns such as floods and droughts. If humanity wishes to preserve a planet similar to that on which civilization developed and to which life on Earth is adapted, CO2 will need to be reduced to at most 350 ppm (Hansen, J. et al, 2008).
This standstill situation is due to the current market rules and demands, which push both, carbon buyers and sellers to stick to a certain type of projects. Innovative projects do exist; projects concerning Reforestation, Reduced Emissions from Deforestation and Degradation (REDD), Biochar sequestered in soil (Terra Preta), etc. do not only avoid or offset GHG emissions but also are extremely beneficial to our natural resources and biodiversity and promote the so-called sustainable development in different ways. But, unfortunately they face a considerable number of barriers to attract investment through the Carbon Market.

In fact, most of the emission reduction projects involving the interaction between organic matter and soil struggle enormously to become eligible for Carbon Finance. They encounter several obstacles such as :

the lack of appropriate methodologies


the demand for a rock-solid measurement of the emission reductions


the possible small-scale size


cost and location of the respective project and the fact that the only currency in this Carbon Market is the ton of carbon dioxide equivalent (tCO2eq.) reduced per year.

The latter also hinders the implementation of innovative projects featuring big awareness rising and education to the potential participants. The reason is that mitigation could be measured in the tCO2eq. currency whereas education to the present and future generations (probably more important than mitigation to cool down our planet in the long term) cannot be reflected in carbon money.

Hence, it is crystal clear that drastic measures are needed. We must not loose time with political mishmash. We must take fast action!

Action Carbone has, therefore, decided to offer you a broad range of innovative projects as an alternative to the strict Voluntary Carbon Offsetting. They will not produce any right to a certificate but they will allow you to assert your participation in the fight against global warming and contribution to sustainable development.