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The term voluntary carbon market usually has one of two effects on people. It either overwhelms them by sounding complex and technical or causes their eyes to glaze over as boredom takes hold and rocks them to sleep. And hey, we get it. A lot of the literature out there is complex, overwhelming, and yes boring. But we don’t think it has to be.

The voluntary carbon market is actually quite exciting. It’s one of the best shots we have to reverse climate change and make sure we have a place to live in 50 – 100 years. That fact certainly raises the stakes a bit. But beyond an existential threat to our existence, there are a lot of other reasons this stuff is interesting.

The voluntary carbon market is where human ingenuity and the natural world come together to make positive change. From machines that literally suck carbon out of the atmosphere to reforesting work that allows Earth to literally breathe, the world of carbon offsets an incubator for creative problem-solving.

Voluntary carbon market overview

The voluntary carbon market is the term for the area of commerce that deals with the un-mandated buying and selling of carbon offsets. Buyers can either be businesses or individuals that opt to offset their carbon footprint by purchasing carbon credits — a unit that represents an amount of carbon that has been removed from the atmosphere.

Even if you don’t realize it, you’ve likely come into contact with the voluntary carbon market before. Think back to the last time you booked a flight — you were likely asked if you’d like to offset your carbon from the trip for a small additional cost. That’s an example of the voluntary carbon market at play.

But the bigger picture goes well beyond booking vacations. The voluntary carbon market also includes small businesses, corporations, and even government bodies that choose to work toward carbon neutrality without being required to do so. Even Google, something you use every day and likely how you ended up on this page in the first place, is carbon neutral in part from the voluntary carbon market.

Why the voluntary carbon market is important

It would be great if we could flip a switch and immediately transfer the entire planet to renewable energy. But the reality is that just isn’t possible. Fossil fuels remain an essential part of how we power our planet and even power the ways we are trying to clean it up. 

Take electric cars for example. While it’s true that they are an excellent way to reduce overall emissions, creating them requires fossil fuels. The minerals for batteries still have to be mined, transported, and manufactured to create the end product – and that requires carbon. 

While we strive to create more renewable forms of energy, the voluntary carbon market can offset the damage we do in the short term. Organizations like Power Nickel, the world’s first carbon neutral nickel mine, is a great example of how companies can power the shift to cleaner energy in the long term while minimizing their immediate impact through carbon offsets. 

Players in the voluntary carbon market

If individuals and businesses create the demand in the voluntary carbon market, who creates the supply? The answer is project developers and they are really where the marketplace starts.

The whole idea of carbon offsetting is that we are reducing the amount of greenhouse gases in the atmosphere. This can either happen by directly removing CO2 from the atmosphere or reducing the amount of greenhouse gasses being released through cleaner forms of energy. But for that to happen, someone has to go out and create a method to do that. Enter project developers.

Project developers are the ones that create the means for reducing carbon. From solar farms to reforestation projects to creating cleaner cookstoves, their projects either reduce emissions or actively remove carbon from the atmosphere. They measure the amount of these CO2 reductions, then quantify them in the form of carbon credits available for purchase.

From there, brokers and retail traders step in to connect the supply of carbon credits to the individuals and businesses demanding them. These brokers are intermediaries, buying carbon credits from projects in large quantities and then selling them to buyers. This is the role that Karbon-X plays both for businesses and individuals like yourself. You can learn more about our platform and the projects we’ve created (we do that too) on our site.

The last group in the market is called Standards. They play a special role in carbon markets by certifying whether a project meets its stated objectives and emission volume. Standards have specific methodologies for different types of carbon projects and ensure that the carbon credits being bought and sold make an impact.

Voluntary carbon market vs. mandatory carbon market

You can think of the carbon market in two parts: the voluntary carbon market and the mandatory carbon market. Both aim to address climate change by reducing greenhouse gas emissions but differ in one major way. The voluntary carbon market is made up of optional participants while the mandatory market buyers are required by law or other regulations to be there.

The mandatory carbon market operates under regulatory frameworks that require specific entities or sectors to comply with emissions reduction obligations or targets. Governments typically implement mandatory carbon markets through cap-and-trade systems or carbon pricing mechanisms. These markets set legally binding emission reduction targets and establish a regulatory framework for companies to monitor, report, and reduce their emissions.

In contrast, the voluntary carbon market allows for more flexibility and encourages proactive action from a broader range of participants. It focuses on driving emission reductions without regulatory obligations and enforcement. 

Both markets play a crucial role in addressing climate change, and their distinct approaches contribute to the global effort to mitigate greenhouse gas emissions.

Voluntary carbon market for individuals

With the future of the planet on the line, more individuals are looking for ways to get involved in the fight against climate change. The beauty of the voluntary carbon market is that it’s open to all and easy to get involved in.

Oftentimes you can offset the carbon of a particular action. We mentioned airline flights earlier in this article, but you can do the same thing with services like package deliveries through certain carriers (UPS is one). Individuals can also indirectly support the voluntary carbon market by purchasing from companies that have made commitments to emissions reductions.

If you really want to make an impact, you can set off your entire carbon footprint with us using the Karbon-X app. Our monthly or yearly subscription uses your money to support offset projects around the globe that are verified and making a big impact. We even let you choose which projects you want to invest in.

Conclusion: Voluntary carbon market

The voluntary carbon market is one of the best tools we have to combat climate change. Businesses and individuals that choose to foster a culture of environmental stewardship can not only offset their footprints but inspire others to do the same. Whether with us at Karbon-X or in your own way, we invite you to get involved and be part of the solution to combat climate change.