SEPTEMBER 20229A Dive into What's Holding the Carbon Industry BackAmidst this backdrop, a major challenge in the carbon space is price transparency. As most offsets trade on OTC markets and through intermediaries, there is no such thing as a centralized marketplace. Some argue that these offsets should be parodies of the many offset types and that this would solve the problem--that is, commoditization of the offset. On the contrary, I believe that each project is unique in terms of the sustainable development goals (SDGs) that it creates or needs. And I could not get a case for a bifurcated market of offsets, where one bucket contains all equal offsets such as solar, wind, hydro, and possibly a handful of other technology types. Then in the other bucket, more distinct projects meet the SDGs, and companies are willing to pay more for those. I could see two buckets, but I do not see a commoditization of voluntary offsets.Another challenge that the market is currently facing is the necessity to scale. Recently, there have been so many net-zero goals announced that some in the industry believe the voluntary market will need to scale 15 times to meet demand. But it is difficult to get enough offset projects up and running in time. As a result, I believe the question is whether or not an entity with a net-zero goal will buy offsets, and I think they must.Companies will not be able to accomplish their ESG (Environmental, Social, and Governance) goals overnight, next year, or even the following year by just lowering their emissions. They will require a transition tool, and that tool or bridging mechanism will be a voluntary offset to demonstrate that they are taking immediate action. Businesses can use the offset while trying to figure out how to cut their emissions.Data Collection Made Easy with a Simplified ApproachOwing to the trends influencing the industry, one best practice that businesses should employ to steer ahead of their competition is the way they collect data to illustrate what their emissions are across their scope, one, two, and three. And the organizations that help companies measure their emissions must devise a very simple mechanism for the entities to unload their data; otherwise, getting all of the necessary data to assess an organization's actual emissions will be extremely difficult. So it is a two-pronged approach. One, it must be simple enough that the entity attempting to report its emissions understands it and can provide the data required to perform the computations. The second is that if they can visualize what the data implies or what data is being requested, the process will be greatly simplified. To that end, what I'm trying to express is the process of data collection from entities that want to understand and report their emissions must be simplified. There also needs to be a means to upload the data in a manner that is simple and easy to understand for the organization reporting their emissions. One best practice that businesses should employ to steer ahead of their competition is the way they collect data to illustrate what their emissions are across their scope, one, two, and three
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