Responsible investment

More and more Swiss companies are voluntarily offsetting their CO2 emissions. However, this process can lead to bad reflexes. More and more companies are financing projects by purchasing carbon credits calculated on the basis of their greenhouse gas emissions. This compensatory approach has been around for a long time, but its limitations remain the same. Its origins lie in the observation that the geographical location from which the CO2 is emitted is irrelevant. This observation raises a number of problems. One of them is measuring the effects expected from offsetting. The other problem is double counting. Companies like to invest in projects abroad, not only because offsetting is much cheaper, but also because industrialised countries have CO2 reduction targets, which is not always the case in developing countries.

Reto Knütti, a professor at the Swiss Federal Institute of Technology in Zurich and a highly respected voice on the international stage, explains the principles behind carbon credits. And their limitations.