MIT Sloan Sustainability Initiative

Work in Progress

Carbon Confusion

Carbon commitments are a core part of the environmental “E” and assume reductions, offsets, and removals that are done and verified correctly.  However, the quality and accuracy of these offset credits are contestable and thus greatly impact investor trust in the carbon market. 

Research in this area is of high importance to any investor in firms that are buying carbon offsets to satisfy “zero carbon” or “net zero” targets which rely on offsets to reflect accurate reductions and removals. 

With the disambiguation of the carbon market and its mechanisms in mind, we are probing fundamental questions around scalability, additionality, asset pricing, and the evolving regulatory environment. 

To this end, we have begun documenting detailed understandings of:

  1. The basic building blocks and standards behind designing carbon offset methodologies
  2. Current problems in measurement and reporting
  3. The incentive structures and governance protocols of its institutions, including that of carbon registries.

Stay tuned for updates on our work!

For more info Angela Chen Research Scientist