There's no way around it. Decarbonization is the fast track to combating climate change. And for that to happen, we need the right technologies and tools, such as carbon markets. A well-designed carbon market incentivizes emissions reduction and promotes sustainable development.
Let's talk net zero strategies first. A credible strategy must follow a well-defined mitigation hierarchy to successfully reach net zero goals. Carbon markets play a crucial role in that strategy. They're the arm that enables companies to compensate for surplus emissions that cannot otherwise be eliminated from their value chains. But bear in mind that proper procedures must be followed when using carbon markets to avoid greenwashing. And when proper practices are applied, innovation blossoms.
But how do you compensate for your surplus emissions? By investing in CO2 reduction or climate mitigation projects. And if you've emitted a lower emission count, your remaining capacity can be traded by others. Here are some examples.
And look at the demand for carbon credits traded in carbon markets, which has grown by a factor of 17 in the last decade. It's projected that carbon markets will grow by a factor of 100 by 2050. This projected growth is only natural as we witness an increased urgency to reach net zero. If organizations, investors and individuals collectively utilize carbon markets the right way, they will have a large impact on the transition to a low-carbon economy.
Stay tuned for our next video, where we will continue exploring the world of carbon markets. Until then, learn more about our work and get in touch at PublicisSapient.com.