The Buyers

In a sample of sellers of voluntary offsets taken by Harris (2007), businesses bought two-thirds of offsets in 2006, while individual and households comprised 17 percent of the market, and events and conferences were less important buyers at 8 percent. In analyzing the criteria adopted by buyers, other than the offset of CO2e, it was found in the study that price per tonne of CO2e was the most important for businesses; and what are called 'co-benefits' to the environment and to community development were also important. In the case of individuals, co-benefits dominated the selection criteria and were more important than price. Events and conferences were most concerned with the reputation of the provider of the offset, as were charities and non-government organizations. As would be expected, non-government organizations (NGOs) were very concerned about whether the project genuinely offset greenhouse gases, that is, the 'additionality' of projects. Additionality ranked relatively low as a concern with most buyers but, along with standards adopted by the providers of their offset product, was a persistent requirement by all groups.

Hundreds of business organizations are going carbon-neutral, while an untold number of individuals are motivated to offset their emissions from business flights or commuting. A survey of the 2007 market by Hamilton et al. (2008) confirmed that most offset buyers in 2007 were private businesses in developed countries. Two-thirds of their purchases were for the immediate offset of the emissions, while the remaining third was as an investment. NGOs comprised 13 percent of buyers, individuals 5 percent and government entities less than 1 percent. Individuals transacted a relatively small proportion of the market, given the small parcels purchased. The greatest demand was from the European Union (EU), with 47 percent of the credits purchased, followed by North America, with 37 percent and Australia and New Zealand 8 percent. The motivation among businesses to reduce emissions is less than in developed countries, while households in developing countries have insufficient income to support luxury goods such as offsets.

Hamilton et al. (2008) confirmed that the criteria applied by buyers were many and varied. Corporate responsibility and public relations branding were very important, as were co-benefits, additionality, certification and reputation of the supplier. The benefits in terms of sales and advertising were important, while price and convenience were less important.

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