The urgency to combat climate change has led to the emergence of various commitments and initiatives aimed at reducing carbon emissions. Terms like "carbon neutral," "net zero," "carbon zero," and "science-based target initiatives" have become increasingly prevalent in discussions surrounding sustainability and environmental responsibility. In this blog, we'll break down what each of these commitment types means and explore how they impact the Voluntary Carbon Market (VCM).

Carbon Neutral

Carbon neutral, also known as climate neutrality, is a commitment made by organizations, individuals, or even countries to balance the amount of greenhouse gas emissions they produce with an equivalent amount of emissions removed from the atmosphere. Achieving carbon neutrality involves a combination of reducing emissions through various initiatives and offsetting any remaining emissions by investing in carbon removal projects such as reforestation, carbon capture, and renewable energy. The goal is to have a net-zero impact on the climate.

Apple is one of the many planet-forward companies making significant strides towards being carbon neutral by setting ambitious goals to have its entire supply chain and product life cycle achieve carbon neutrality by 2030, while actively investing in renewable energy and reforestation projects to mitigate its carbon footprint.

Carbon neutrality commitments drive demand for carbon offsets in the VCM, as organizations seek to balance their emissions and support projects that remove or avoid carbon emissions from the atmosphere.

Net Zero

Net zero, like carbon neutrality, aims to balance emissions produced with emissions removed. However, the term "net zero" typically implies a more ambitious timeline, often set for the mid to late 21st century. Achieving net zero means reducing emissions as much as possible and utilizing carbon removal technologies to offset any remaining emissions. It is a critical target for limiting global warming to well below 2 degrees Celsius above pre-industrial levels, as outlined in the Paris Agreement.

Ford is committing to achieving net zero carbon emissions by 2050 by conducting scientific research to control various emissions scopes, investing $11.5 billion in electric vehicles in 2022, and transitioning to locally-sourced renewable energy at all plants by 2035.

The commitment to reaching net zero accelerates the demand for carbon offsets and motivates increased investment in carbon removal and avoidance projects within the VCM.

Carbon Zero

Carbon zero is a broader and more encompassing term that signifies the complete elimination of carbon emissions. Unlike carbon neutrality and net zero, carbon zero does not allow for any offsetting or compensatory measures. Organizations or regions that declare carbon zero commitments are pledging to reduce their carbon emissions to zero through internal measures and transitions to sustainable energy sources.

Denmark is transitioning to carbon zero by implementing ambitious energy efficiency measures, renewable energy investments, and sustainable transportation initiatives, aiming to eliminate carbon emissions entirely.

While carbon zero commitments may not directly drive demand for carbon offsets, they set a high standard for sustainability that can influence corporate and government policy and encourage the development of carbon reduction technologies and practices.

Science-Based Target Initiatives

Science-based target initiatives (SBTIs) are commitments made by organizations to align their emissions reduction goals with scientific recommendations to limit global warming. SBTIs use climate science to set specific, measurable, and time-bound targets that are consistent with the goals of the Paris Agreement. These targets often involve reducing emissions in line with keeping global temperature rise below 1.5 degrees Celsius.

Unilever is using Science-Based Target Initiatives (SBTI) to set emissions reduction targets in line with the Paris Agreement, with a commitment to achieving a 100% reduction in carbon emissions and sourcing 100% renewable energy by 2030.

SBTIs are crucial for shaping corporate behavior and government policy, as they push for more aggressive emission reduction efforts. This, in turn, influences the VCM by fostering demand for carbon offsets to meet stringent emissions reduction goals.

A Path to Carbon Accountability

Understanding the various commitment types - carbon neutral, net zero, carbon zero, and science-based target initiatives - is essential in the fight against climate change. These commitments reflect the evolving landscape of environmental responsibility, pushing organizations and governments to take more ambitious steps toward reducing carbon emissions. As these commitments gain traction, the Voluntary Carbon Market plays a vital role in supporting the transition to a more sustainable, low-carbon future by providing the means to offset emissions and invest in carbon removal and avoidance projects. By participating in these initiatives and supporting the VCM, we can collectively work towards a healthier and more sustainable planet.