One recent morning I noticed I had run out of coffee. So I did what any morally upstanding person would do.
I booked a flight to Costa Rica.
Upon arrival, I took a taxi to a coffee farm, filled up a bag with ripe coffee cherries, and after haggling with the farmer over a fair price, I headed back home to the U.S., where I peeled, processed and dried the cherries; roasted the beans; ground the beans; brewed the beans; and — three days later — enjoyed a very flavorful cup.
Of course, I didn’t do that. It would be grossly inefficient.
Thankfully, there is a well-functioning global market that enables coffee to be bought, sold, processed and shipped around the world — including to my local grocery store — while minimizing inefficiencies and costs (and with fair trade options). Judging by coffee’s popularity, this market is highly valued.
So I’m puzzled when people come out swinging at markets for carbon.
The idea behind carbon markets is that businesses or individuals that emit climate-warming carbon — that is, all of them — can voluntarily pay to neutralize some of those emissions by buying and trading “carbon credits.” (More on those here.) The market for carbon is still in its early days, but is growing fast, according to a recent report. Companies, scientists and policymakers are still sorting out what this market should look like, with stronger rules and structures coming (and likely to spur even more private-sector investment in turn).
But many of the same people who cherish the coffee that markets provide for them are outspokenly contemptuous of carbon markets, arguing that carbon credits are no more than license for nefarious companies to pollute, for unscrupulous nonprofits to chase funding and for timid policymakers to avoid tough decisions.
This is nonsense. Attacking the mere existence of carbon markets is intellectually lazy. Worse, it hampers climate progress.
And we need to make progress fast.
A few decades ago, we may have had the luxury of debating whether carbon markets could offer an alternative to fossil-fuel cuts — but no longer. We need both. The record-smashing heat waves that scorched the Pacific Northwest earlier this year herald what’s to come if we don’t bring carbon emissions down by any means available. A blockbuster report released in August found that our planet is nearing climate “tipping points” that may not be reversed in our lifetimes.
Carbon markets offer two things we need right now.
The first is speed: Carbon markets can provide a turbo boost to a low-carbon future by delivering more climate benefit, more quickly, on a mass scale for less money.
For example, California’s cap-and-trade system has hastened the speed at which industries change by integrating mandated emissions cuts with the ability to trade more expensive emissions reductions alongside less expensive ones, while continually ratcheting up the market price of carbon.
One estimate suggests that carbon markets will have to grow more than 15-fold by 2030 to enable the investments needed to keep Earth’s climate well below the 2-degree C (3.7 F) threshold identified by scientists as extremely dangerous. Fortunately, humanity has much experience in building well-functioning markets quickly — provided the right systems and rules are established, as a recent report urges, to ensure maximum climate impact.
The second is reach: Carbon markets can enable solutions that regulations and carbon taxes alone cannot — that includes using the power of nature itself to draw down carbon.
A subsistence coffee farmer in Central America, for example, would not respond to U.S. laws requiring corporations to halt fossil-fuel emissions. But carbon markets can provide the funding to allow that farmer to make a sustainable living by restoring carbon-absorbing forests while growing shade coffee, instead of the usual method of clearing forests.
It’s no surprise that creating a new global market is not simple — least of all a market for carbon, the backbone of all life on Earth. So let’s not get too discouraged by growing pains. We must remain open and optimistic about the power and reach of markets while recognizing that we must carefully constrain them with our shared moral values. They are a means, not an end, with nuance and limitations to be sorted out.
Critics of carbon markets should consider coffee as an example of what is possible.
- FURTHER READING: As pandemic pounded Peru, one region thrived on coffee, carbon
For years, unsustainable farming and unethical practices dogged the coffee industry. My organization, Conservation International, has worked with small-scale farmers, global retailers and everyone in between to move coffee toward becoming the first sustainably and ethically sourced commodity. Much work remains, but we are well on our way there.
The next time you’re enjoying a cup of (sustainably sourced) coffee, remember that markets made it possible. If we are to fix the climate crisis, we’ll need them.