> So, the economically sensible thing is spend $100 to make factory B more efficient, instead of spending $10000 to undo the effect of factory A
This is where my understanding breaks down. I don't think this is true at all. I think the opposite is true - it's economically sensible to remove the pollution immediately from the first factory, not to (conditionally promise to) reduce the future output of another factory.
I don't get it. The planet is heating up and each degree we go is going to cost untold trillions. Saying it is economically sensible to try to reduce future output over not making new output at all is the part I don't get. It's just not true that you can choose to pollute more now and promise that it'll be a reduction in pollution output later and come out ahead. You will come out behind on this. The climate is changing faster than we are able to clean it up.
> So the system can work, as long as everybody's honest (or as long as there's some system that verifies that they are honest).
There is no such system. And in the US, the current Republican government is dismantling all oversight that may have existed or could exist to help this.
Another example: Exxon knew about the damages their products were doing to our health, but they lied about it for 50 years.
So I stand by my points. This idea does not work, and Cloudflare is taking positive credit for "reducing their carbon output" but I think it's just a lie. It simply cannot be true.