The Demand for Carbon Offsets in the United States: A Snapshot of U.S. Buyers on the Global Voluntary and California Compliance Markets

Client Organization: 
The Mexican Fund for the Conservation of Nature, A.C.
Project Location : 
Ann Arbor, MI & Doha, Qatar
Summary of Project Idea: 

While the supply-side of carbon markets is relatively well documented, understanding of demand is more elusive.  Research on demand has generally gone through the developers and sellers of carbon offsets to infer the inclinations of buyers.  While those who sell carbon offsets often have considerable insight on those who buy them, they sometimes lack a holistic view of a voluntary buyer's decision-making - their motivations, preferences, and process.  Our research offers a glimpse into this little-studied dimension of carbon markets. 

More specifically, our master's project aims to shed light on the demand for carbon offsets in the United States, both among companies purchasing offsets voluntarily and California entities purchasing offsets as part of their compliance obligations under the new greenhouse gas regulation in the state.  Our research focuses on three key questions:

  1. Motivations: Why are firms choosing to purchase carbon offsets?
  2. Preferences: What are firms' preferences in terms of offsets, if any?  What factors do they consider when investing in an offset project or portfolio of projects?
  3. Process: How are firms navigating the carbon marketplace, and what decision-making processes are they using when purchasing offsets?

To answer these questions, we surveyed compliance companies in California, did case studies of five major companies purchasing offsets on the voluntary market, interviewed dozens of buyers and other market participants, and attended the 18th UN Framework Convention on Climate Change in Doha, Qatar.  Our results offer an inside view of how U.S. firms are participating in the voluntary carbon market as a part of larger sustainability goals and how California entities are thinking about carbon offset purchases in the context of regulation.

SEAS Program Areas: 
Environmental Policy and Planning
Environmental Informatics
Environmental Justice
Sustainable Systems
SEAS Faculty Advisor: 
Bill Currie
Master Students Involved in Project: 
  • Hannah Erickson, MS Environmental Policy and Planning
  • Nancy Gephart, MBA/MS Sustainable Systems
  • Allie Goldstein, MS Environmental Justice/Environmental Policy and Planning
  • Sam Stevenson, MBA/MS Environmental Informatics
Project Status: 
Past Project