Carbon is generally seen as a problem in the climate debate. What is less often recognised is that for many years it has also been a commodity.

You’ve probably come across domestic carbon offsetting. You may have balanced the carbon emissions of a holiday by paying a bit extra to investment in wind farms or energy efficient light bulbs in the developing world, for example. It’s not just a domestic activity though, the larger story is of governments and business trading carbon they’ve emitted to comply with emissions caps, a process which has long been embedded in policy.

As well as carbon offsetting, there is increased discussion of biodiversity offsetting: build on green space in return for paying to restore or maintain equivalent environments elsewhere. This brings up a whole host of further possible controversies; There are scientific, political and ethical questions over the validity of putting an economic price on nature.

Critics of the approach argue it is short-term, and unjustly shifts the problem to the global south. Researchers at the Institute of Development Studies have explored the issue of ‘green-grabbing’ – land appropriated for environmental activities – across Africa, Asia and Latin America. Other critics point out the opportunities offsetting provides for ‘greenwash’ – when a company’s marketing of its green image exceeds its efforts to become green. Or they worry that carbon trading has simply created new markets ripe for exploitation while climate change continues largely unabated. Advocates, however, argue it offers a workable system for making our current economic systems work for the environment. There is space for improvement, but to many it also offers hope.

If you want to read more: A recent round-table on natural capital offers a range views on the topic. For a longer read, try Donald MacKenzie’s Political Economy of Carbon Trading.