Consumer Adoption of Carbon Credits — BCG Survey
Earlier this year, Boston Consulting Group (BCG) conducted a survey on consumer adoption of carbon credits. While carbon credits are widely used by the corporate sector as part of their response to the growing threat of climate change, the BCG report finds that relying on businesses and institutions is not enough, “governments and industry must take bold action, consumers must also act.”
The BCG survey found that a surprisingly large proportion of the US population is willing to act. The survey showed that once carbon credits were explained, 38% of a representative sample of US consumers were interested in purchasing credits in the near future.
“We found that 34% of respondents in the representative sample were familiar with carbon credits, 19% were open to purchasing credits within the next two years, 3% had purchased credits in the past, and 2% purchase credits on a regular basis. These findings suggest there is substantial room for growth in the voluntary market for carbon credits through increased consumer awareness.”
Greater awareness is key to more consumer adoption of carbon credits and they are demanding deeper information, “They are interested in learning about the carbon footprint of their everyday purchases, seeing evidence that carbon credits are an effective tool to mitigate these emissions, and obtaining details about the specific projects they would be supporting.”
Transparency is a key area where blockchain technology can contribute to the growth of the voluntary carbon market. On-chain carbon development can provide governments, businesses, and consumers alike with immutable evidence supporting a project’s additionality, traceability, and permanence. All crucial factors when assessing the quality of an individual project and therefore the carbon credits that it issues.
While consumer adoption of carbon credits is currently low, consumer sentiment toward offsetting was significantly positive, “Of respondents who were somewhat familiar with carbon credits (250 of those in our representative sample), 58% believed that carbon credits can encourage more sustainable behavior.”
Early adopters, who had purchased carbon credits in the past two years largely belonged to urban communities, typically millennial, well-educated, tech-savvy males with higher incomes and greater awareness of their carbon footprint compared with other survey segments.
Potential early purchasers, who have not previously bought carbon credits but are highly likely to in the next two years come from a similar demographic to early adopters. This group of respondents said they were “extremely interested in buying credits.”
Potential later purchasers, are generally less aware of their carbon footprint and the type of carbon credit projects available than the earlier two groups were — and less enthusiastic about purchasing credits. In terms of demographics, they were split 50/50 between male and female, 52% urban, and 56% had an advanced degree.
Remaining potential purchasers, had shown some interest in buying credits, or had acted on two sustainability initiatives, such as recycling. Only 20% of the remaining potential purchasers were familiar with carbon credits, but 49% were interested in them; when asked to identify the main barriers to purchasing them, 42% cited a lack of understanding of the credits and 30% indicated a lack of transparency on the impact of the credits. In terms of demographics, many were in their early 40s, females slightly outnumbered males, and most held college degrees. Educating these remaining potential purchasers about carbon credits could go a long way to increasing adoption among this segment.
While there is debate over whether companies should carry the entire burden for the climate-changing emissions they create, or whether customers should take some responsibility for their own carbon footprint, there is certainly no harm in both business and consumers taking more action given our continued failure to hit our emissions reductions goals.
Businesses should also take note that consumers have lower awareness of their own carbon footprint and potential remedies, they are aware enough to take their purchasing power to brands that take the climate threat seriously.
A lot of the consumer education burden must fall on companies. They must be as clear as possible about the nature of the projects being supported, the process for supporting them, and the amount of carbon mitigated. Businesses can further help by offering low-friction ways for consumers to access reputable credits in the purchasing journey. For example, companies can partner with third parties to provide an option to buy credits at the point of sale.
The BCG report offers a clear conclusion, “It’s time for consumers to not only learn more about climate change and the role of carbon credits but also take action through carbon offsetting. Similarly, businesses have a responsibility to enable ways for consumers to offset purchase emissions seamlessly and provide transparency regarding the carbon footprints created and proof of carbon project impact.”
We are failing in our climate goals, there is now only a 40% to 60% chance of limiting the global temperature rise to 1.5°C above pre-industrial levels by 2030. We need more carbon credits, and more business, and consumer action. The threat is real and the time for action is now.
