For a long time, I didn’t understand why some people held such negative opinions about carbon credits. You hear it all the time— “They’re just paying to continue polluting.” And I thought they were missing the point. But recently, I realised they’re not actually wrong. They’re just talking about the wrong kind of carbon credit.
What they’re usually referring to are compliance carbon credits—the realm of heavy industry and power generation, where companies are legally required to buy credits in order to keep polluting.
In that sense, yes—they really are just paying to continue polluting.
And that’s the problem. While they may share the same name, compliance and voluntary carbon credits are not the same thing. Lumping them together creates confusion, fuels criticism, and risks throwing out something incredibly valuable in the process.
Same label. Very different products. One is about permission. The other is about progress.
So, let’s break it down.
Compliance Carbon Markets: The Utility Bill of Pollution
The compliance market is the world of cap-and-trade, where companies buy permission slips to keep emitting greenhouse gases. Think of it like paying your water bill—obligatory, transactional, and devoid of anything else.
These credits don’t represent carbon being removed from the atmosphere. They’re about staying within legal limits and paying more if you pollute more. It’s compliance economics—a system designed to incentivise doing less harm, while making it more expensive to do more harm, not create more good.
No tangible restoration. No net gain. Just accounting. Just permission.
Voluntary Carbon Markets: Sparkling Water with a Slice of Planet-Saving
With the voluntary market, businesses and individuals choose to invest in the removal or avoidance of carbon emissions. You can think of it like ordering sparkling water in a beautifully blown glass bottle at a restaurant, supporting jobs in the restaurant, and glass-blowing businesses, respectively. You didn’t have to. You chose to. And you paid more for it.
And crucially, you can’t just turn on the tap and expect sparkling water to come out.
These two systems aren’t interchangeable. Compliance credits are designed for a specific group of large emitters—power plants and industrial giants—operating in a closed loop. The average business, let alone an individual, can’t and shouldn’t access them.
Voluntary credits, on the other hand, are open. Accessible. Impact-led. They exist to fund tangible, measurable environmental restoration—projects that remove carbon and deliver far more than climate benefits.
And in our analogy, while both are technically “water,” there is no price correlation between the two. Your utility bill going up doesn’t suddenly make your bottle of San Pellegrino more expensive.
Same category, but a completely different product. No price linkage. No substitution.
Voluntary credits fund real, boots-in-the-mud projects. Planting woodlands. Restoring peatlands. Rewetting wetlands. Regenerating soils.
And they don’t just sequester carbon. They slow floodwaters. Cool rivers. Shelter wildlife. Create green jobs. Rebuilding rural economies left behind by the race to the bottom.
When done right—and it must be done right—voluntary carbon credits aren’t an excuse. They’re a contribution. Not a get-out clause.
Premium Impact, Premium Price
Voluntary credits are smaller in scale but can be much higher in value. And that’s the point. They’re not a mass-market compliance product. They’re a high-integrity choice for businesses that want to lead, not lag.
There’s an important word ‘can’ in that sentence. Unlike with compliance credits, where every allowance to pollute is the same as the other. In the voluntary market, every credit is different. Some of them are produced by schemes with dubious methodologies that support questionable practices, and some are delivering real-world carbon impact as well as delivering huge environmental and social impact.
Those low-quality voluntary credits should (and do) cost less than compliance credits. In fact, they shouldn’t be allowed at all, and we are seeing increasingly that these types of credits are being rejected by the market. However, the high-quality credits – the ones that restore nature and provide a positive environment and social impact, in addition to carbon removal – should (and are) priced higher than compliance credits as organisations are increasingly willing to invest in schemes that deliver real value.
These high-quality voluntary credits reflect environmental ambition—but also brand values, corporate culture, and a willingness to be part of the solution.
And when done well, they’re bought in addition to reducing internal emissions, not as a replacement for reducing emissions. The best companies don’t buy credits to avoid responsibility. They do it to scale their impact.
This isn’t a shortcut. It’s a statement.
The Real Problem Isn’t Carbon—It’s Communication
Let’s acknowledge something important: this stuff is complicated and confusing. The fact that both compliance and voluntary credits are called “carbon credits” is part of the problem. It creates confusion, fuels cynicism, and makes it all too easy to misjudge something that—when done properly—has the power to deliver real, lasting change.
Like so many things in the environment sector, carbon credits don’t just have a trust problem.
They have a communication problem.
This isn’t just about policy, pricing, or permanence. It’s about storytelling. It’s about helping people understand what they’re buying, why it matters, and what it enables. The voluntary market doesn’t just need high integrity—it needs better marketing.
And that’s something all of us—project developers, businesses, buyers, advocates, critics—need to help fix. Because if we let confusion win, we’ll lose one of the few tools we have that can fund nature-based solutions at scale, right now.
So no, it’s not perfect. But if you’re looking for a reason not to act—you’ll find one. If you’re looking for a reason to make progress—high-quality voluntary carbon credits offer a solution.
If tap water vs sparkling water doesn’t work for you, please feel free to substitute in some alternative analogies, perhaps your television licenses and Sky TV, or your standing charge for energy and power from renewable energy suppliers – we’d love to hear your analogies too.