As climate change intensifies, the pressure on companies and individuals to reduce theircarbon footprint has never been greater. An effective and rapidly growing solution is thepurchase of green carbon credits, a way to offset greenhouse gas (GHG) emissions throughinvestments in projects that remove or avoid carbon emissions from the atmosphere.
What are Green Carbon Credits?
Carbon credits are certificates that represent the reduction of one ton of carbon dioxide (CO₂) or its equivalent in other GHGs. They are issued by projects that promote sustainability, suchas reforestation, forest conservation, renewable energy production and carbon capture. In Brazil, where the preservation of the Amazon and other biomes is essential for global climatebalance, these credits play an even more critical role.
How does the purchase of carbon credits work?
Companies and individuals purchase carbon credits to offset their emissions that cannot beeliminated through other sustainable practices. For example, a company that emits 10,000 tons of CO₂ per year can purchase 10,000 carbon credits to neutralize its environmentalimpact. These credits are sold by certified projects that are monitored and verified to ensurethat carbon reductions are real, measurable and permanent (MSCI).
The Carbon Market in Brazil
Brazil is in a unique position in the carbon credits market. With vast tropical forests and richbiodiversity, the country has immense potential for carbon projects. However, theeffectiveness of these projects depends on robust governance and transparency in the creditcertification and sale processes. The creation of a regulated carbon market in Brazil has beendiscussed as a way to ensure that carbon reductions are authentic and that projects trulycontribute to climate change mitigation.
Importance for Companies and Consumers
Purchasing carbon credits not only helps mitigate the environmental impact of humanactivities, but also brings reputational benefits to companies. With consumers and investorsincreasingly concerned about sustainability, companies that adopt green practices have a competitive advantage. Studies indicate that consumers are willing to pay more for productsand services from companies that demonstrate a real commitment to reducing their carbonemissions (MSCI).
Challenges and Opportunities
Despite the benefits, the carbon credits market faces challenges. The issue of “greenwashing” is a concern, where companies may buy credits to appear sustainable without makingsignificant changes to their operations. Therefore, it is essential that companies choose high-quality projects, with internationally recognized certifications, such as the Verified CarbonStandard (VCS) or the Gold Standard.
Furthermore, adopting new technologies to monitor and verify carbon reductions is vital tomarket credibility. Innovation in areas such as blockchain is being explored to ensure thetransparency and traceability of carbon credits.
The Role of Market Research
For the purchase of carbon credits to be truly effective, it is crucial that companies understandhow sustainability is perceived by their target audience. Market research can provide valuableinsights into what consumers expect from sustainable brands and how environmentalpractices impact their purchasing decisions.
Do you want to know if sustainability is a competitive differentiator for your company? Contact us and discover, through detailed research, how your brand can align with theenvironmental values of your consumers.
Sources:
● MSCI: “Carbon Credits in 2024” (MSCI)
● BCG: “The Next Frontier in Carbon Credits” (2023)
● World Bank: “State and Trends of Carbon Pricing 2023”
