Game Changer

CHAPTER 24CO₂: How to Encourage Lower Carbon Emissions

With contributions from Christian Haakonsen, John Pineda, Matthew Gordon, and Paulina Ponce de León

Fending off damaging climate change is like a timed game of chess we can't afford to lose. The unregulated burning of fossil fuels by individuals, corporations, and nations alike contributes to the buildup of greenhouse gases in the atmosphere. As a result, addressing carbon emissions requires collective action and shared responsibility to avoid the “tragedy of the commons,” the phenomenon that occurs when people collectively deplete a common resource by pursuing their own self‐interest.

The odds of avoiding checkmate improve significantly if the world meets one target: keeping cumulative carbon dioxide (CO₂) net emissions under 350 gigatons between now and 2050. Failing to take steps to curb carbon emissions could lead to disastrous outcomes, including rising sea levels, extreme weather events, food and water shortages, and the spread of diseases.

Carbon credits can help accelerate progress toward this objective. They represent a specific unit: one metric ton of CO₂ either removed from or kept out of the atmosphere. Governments made some progress by implementing cap‐and‐trade mechanisms, with uniform market prices for one tonne of carbon emission rights. Companies that reduced their emissions beyond regulatory requirements ...