Does anyone know if carbon credits actually work? In theory, they seem great. In practice, I’d expect them to be rife with abuse.
It can work out to close to half the cost of the installation, and combined with other incentives (like getting near free electricity for your own consumption) it means you'll generally recover your upfront investment in full after about five years. Solar panels last 20+ years, so it's a very good investment that has lead to Australia having the highest update of rooftop solar in the world.
Without the carbon credits scheme, it'd probably still be a good investment to install rooftop solar, but you'd be waiting a lot longer than five years to get your money back, and the longer timeline increases your risk substantially (what if severe weather destroys your solar panels?).
Yes - they are rife with abuse. People and companies routinely make promises about how much carbon they've saved that don't reflect reality. But they are also great — they absolutely encourage and fund investments that reduce our global carbon footprint.
Just because a system isn't perfect, doesn't mean it's a bad system.
Most people care about the environment and are worried about climate change. Most also understand very little about geoscience. There is a lot of pressure on governments and corporations to just do "something" about it, but few concrete demands. That's why deceptive practices and outright scams are so common, especially in so-called carbon offsetting and carbon removal schemes.
Having a bit of relevant scientific background, I've sadly seen more than once how questionable carbon offset companies infiltrate communities and corporations to get them to buy in. Some of them spend a lot of time lobbying and advertising on a grassroots level to get cooperation deals. Warning folks has not worked in the cases I've tried because as soon as you question it you're viewed as a climate skeptic who does not care about global warming and getting into hours long discussions with non-experts trying to explain to them why a certain promise can not work in reality the way it's described on the carbon credit website is pointless. Their promises and beautiful pictures of green forests and blue skies are a lot more persuasive sadly since it's professional marketing.
[1] https://www.theguardian.com/environment/2023/jan/18/revealed...
[2] https://www.theguardian.com/environment/2023/may/24/chevron-...
https://www.ft.com/content/3f89c759-eb9a-4dfb-b768-d4af1ec5a...
I like how by the end of the article the economists are just suggesting adding like a 20% buffer to the calculations rather than talking about more fundamental problems.
But that's not the same as saying "there's a lot of racket and bias". In fact my impression is that most of these firms are sincere and not cheating at all. But over time, this is absolutely going to need some regulatory attention.
In regular “marketplace” transactions, the buyer wants the genuine product and will be upset if they are defrauded.
In a carbon credit market, the main thing the buyer cares about is the paper, not the thing that the paper is supposed to represent. Certainly, many buyers of carbon credits do care about it being legitimate. But it is more of an altruistic caring, compared to the strong feelings that come up when one gets ripped off.
Because of this dynamic, everything else held equal, there is going to be more fraud.
So every tonne of CO2 avoided counts twice. It's a way to inflate the progress that actually happens.