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Climate change is one of the biggest challenges facing humanity. This blog, based on the first chapter of carboncreditcapital.com’s widely respected Climate Change and Carbon Markets 2023 Report, breaks down the key facts into bite-sized chunks to help you get up to speed on the science and potential fixes, with a focus on carbon credits.

 

Greenhouse Gases Trap Heat and Drive Climate Change

The greenhouse effect is a natural process where gases like carbon dioxide, methane and nitrous oxide act like a blanket, trapping heat from the sun and keeping Earth warm enough to support life. But human activities since the Industrial Revolution have pumped out extra greenhouse gas emissions from burning fossil fuels, agriculture, deforestation and manufacturing.

These extra emissions are dangerously strengthening the greenhouse effect and disrupting the climate system. As concentrations rise, more incoming solar radiation gets absorbed, while less infrared radiation escapes to space. This growing energy imbalance is resulting in rising global temperatures, shifting weather and ocean patterns, melting ice, and more frequent and intense droughts, floods and storms worldwide.

 

A Truly Global Challenge

Greenhouse gases mix uniformly in the atmosphere – emissions anywhere impact people everywhere. So no single country can solve climate change alone. Mitigating climate risks requires cooperation between governments, corporations and citizens worldwide. But because the harms of climate change are distributed unequally, with developing nations bearing the greatest burdens, it’s challenging to align costs and incentives. Overcoming this collective action problem is key to an equitable and effective climate solution like carbon credits.

 

What Are Carbon Credits?

Carbon credits are tradeable permits that give the holder the right to emit a certain amount of carbon dioxide or other greenhouse gases. The total amount of credits issued is limited by caps set by regulators to help meet national emissions reduction targets.

Companies can buy credits from the market if their emissions exceed their allowance. The transfer of permits ensures emissions cuts are made most cheaply by incentivizing reductions in sectors where abatement costs are lower. This market-based approach offers flexibility and reduces the overall economic burden of transitioning to a low-carbon future.

For individuals, purchasing carbon credits is a way to take responsibility for offsetting the emissions associated with daily activities that are difficult to avoid, like home energy use, driving and flying. The funds go towards emissions-reducing projects to counterbalance your carbon footprint. Popular offset types include renewable energy, forest conservation and clean cookstoves.

 

What Are the Effects of Climate Change?

Rising seas

Melting land ice and expanding warmer oceans are causing accelerating sea level rise globally. Coastal cities and islands face risks of flooding and permanent inundation. Between 1901-2018, global sea level rose 20 cm on average. The rate of rise is accelerating.

Hotter temperatures

Most of us can witness that the last decade was hotter than any time in the past 125,000 years, a fact confirmed by 99.9% of all scientific studies conducted on the topic. Our current trajectory guarantees even more heatwaves and less cold snaps. Far from being merely a question of “comfort”, this trend directly impacts the lives of each and every one of us, and global food security as a whole – each additional 1°C of warming decreases grain yields by 10% on average.

Extreme weather

Heavy rainstorms, hurricanes, droughts and wildfires are becoming more intense and frequent due to climate change. One only needs to watch the news on any given day to see how people’s lives are affected worldwide. A warmer atmosphere holds more moisture, fueling more precipitation when it does rain. But it also leads to quicker evaporation and drying between rain events, expanding drought risks.

Shrinking ice

Glaciers and Arctic sea ice are rapidly declining. Since 1980, Arctic sea ice extent has plunged by nearly 50% in summer and fall. Shrinking glaciers threaten water supplies for over 1 billion people worldwide who rely on seasonal meltwater runoff. Melting permafrost damages infrastructure and releases more heat-trapping gases.

Acidic oceans

Increased CO2 absorption makes seawater more acidic, endangering coral reefs and shellfish. Fish populations are shifting as oceans warm, threatening food security for people who rely on seafood.

Biodiversity under threat

Climate change is accelerating species extinction rates. Shifting climate zones will force many organisms to move or adapt. Those that can’t will perish. Nature’s complex web of life will unravel, with ripple effects throughout ecosystems.

Threats to health

Warmer temperatures expand the range of disease-carrying mosquitoes and ticks. Heat waves cause more premature deaths. Wildfires lead to respiratory illnesses. Food and water shortages will undermine nutrition and food safety. Allergies will worsen with more pollen production.

Climate conflict

Scarce resources like food, water and shelter increase conflict risk after climate disasters and in regions suffering water shortages. Millions of climate refugees, such as those escaping the Sahel region in Africa, will further aggravate political tensions between the global North and South. The Syrian civil war is an example of the horrors and suffering we can expect to witness.

Economic impacts

Extreme weather causes billions in damage to homes, businesses and infrastructure. Fighting climate change will require massive investment. But inaction carries an even higher price tag – up to 20% GDP loss by 2100. Transitioning to clean energy now makes economic sense.

 

Which Activities Produce the Most Emissions?

The top emitting sectors globally are:

  • Electricity/heat (31%)
  • Agriculture (11%)
  • Transportation (15%)
  • Forestry (6%)
  • Manufacturing (12%)

Within these sectors, the biggest contributors are:

  • Coal power
  • Gas power
  • Oil/petroleum
  • Industrial processes like cement and steel production
  • Deforestation and livestock
 

The United States, China and India generate nearly half of all carbon pollution.

 

We Can Solve This – Here’s How:

Though daunting, the climate crisis is not hopeless.

The technologies exist today to transition our energy, transportation, building and industry sectors away from fossil fuels and towards clean options like wind, solar, electric vehicles, hydrogen fuel cells, nuclear power, and next generation biofuels.

Natural climate solutions like forest protection and climate-smart agriculture can remove large amounts of carbon from the atmosphere cost-effectively while providing environmental and social co-benefits.

 

Key solutions include:

  • Massively scaling up wind, solar, nuclear power, electricity transmission grids, battery storage and energy efficiency.
  • Phasing out coal power and transitioning to electric vehicles.
  • Slashing methane emissions from oil/gas operations.
  • Protecting and restoring forests, wetlands, grasslands and farmlands to absorb CO2.
  • Investing in innovative new technologies like carbon capture and green hydrogen.
  • Putting a price on carbon through cap-and-trade schemes and carbon taxes to incentivize emissions reductions industry-wide.
  • Expanding the voluntary carbon credit market so individuals and companies can offset their emissions.

By making deep emissions cuts now, we can still limit warming to 1.5°C and avoid catastrophic climate change impacts. But action must start immediately – delay risks irreversible harm. Now is the time to get informed, change habits, contact elected officials and get involved. Our future depends on it!

 

To learn more about the state of Climate Change, Carbon Markets and how these affect each and every one of us, contact us for the full report.

Carbon Footprint

The Strategic Case for Nature-Based Carbon Investments

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Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.

1. Define the sourcing problem before choosing a project

Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.

This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.

CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.

2. Develop nature-based carbon investments around the actual supply chain

The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?

Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.

Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.

The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.

3. Compare the proposal with other ways to protect supply

WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.

The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.

The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.

The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.

4. Establish what the carbon outcome could count toward

Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?

Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.

SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.

For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.

Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.

5. Build a financial case that survives weaker assumptions

Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.

Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.

Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.

A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.

6. Fund a pilot with a clear expansion decision

Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.

Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.

Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.

This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.

Discuss a sourcing opportunity with CCC

Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.

Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.

Sources

  1. Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
  2. World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
  3. Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
  4. United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
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Carbon Footprint

How to buy plastic credits, and what to check before you do

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A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.

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Carbon Footprint

EU carbon credit claims after 27 September 2026

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EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.

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