Carbon credits - Taylor's version

The news that Taylor Swift has purchased carbon credits to offset the emissions of her Eras tour has catapulted the voluntary carbon market (VCM) into the mainstream of pop culture. It is also a parable of one of the central divides in the carbon credit debate.?

Trigger warning for Swifties. This isn’t meant to target Taylor specifically. While the emissions associated with her tour are significant, she is not the problem. Could she use her massive platform better to advocate for climate issues? Yes. Are her emissions going to make or break our effort to keep the Paris Agreement in reach? No. The billions of tonnes of emissions associated with corporate value chains is the much bigger nut we need to crack.?

But the way her team has approached the purchase of carbon credits does help illustrate an important point. It’s an example of an approach that causes significant concern amongst market critics. The offsets were purchased to deflect criticism, with few details shared about what offsets were purchased and what other efforts the tour would make to reduce emissions.?

Taylor’s version represents what is increasingly being called “VCM 1.0”. Over the past couple decades, in response to growing pressure from stakeholders to demonstrate some sort of climate action, companies started to express demand for relatively cheap carbon credits, while in many cases making only loose or vague commitments to reducing internal emissions. That’s VCM 1.0 in a nutshell.?

To date, the market has been pretty small, but it’s growing fast. Critics fear that if this version of the voluntary carbon market continues, it will serve primarily as a large-scale mechanism for companies to purchase indulgences that allow business as usual, or, at the very least, to excuse themselves from taking some tougher actions. In the Taylor example, it means that carbon credits would continue to allow the pop superstar to look like she is supporting climate action without any other consideration for how she might reduce the emissions associated with her global touring.?

This is a valid concern, and one that advocates of “VCM 2.0” take seriously. There are many features associated with this emerging concept, including around the quality of the underlying credits, but a key component is installing a new norm around corporate use of offsets.?

Simply put, VCM 2.0 flips the script by acknowledging that companies need to prioritise rapid emissions cuts, in line with the science, but that they also need to take responsibility for their current emissions now. The rationale is simple. When used alongside science-based emission cuts, carbon credits actually support even more ambitious climate action. Instead of a paradigm that says companies should only purchase offsets to balance out any emissions that remain after they’ve cut everything they can, the new norm says that companies should be compensating for at least a portion of the emissions that they continue to put in the atmosphere even as they work to cut them in line with science.?

So should Taylor drop offsets? Absolutely not. If she really wanted to be a climate leader, for the next tour her team should implement all available options for reducing its carbon footprint, in line with the best available guidance, and then also purchase the best available carbon credits to compensate for the remaining emissions.

The same holds true for companies. Don’t drop credits. But use them differently: as a complement to a broader climate strategy that prioritises in-chain emission cuts. While market proponents should heed concerns associated with VCM 1.0, market critics should open their eyes to the potential of VCM 2.0.?