in practice the answer is that some companies create negative externalities in the form of carbon emissions, and due to some combination of regulation, customer pressure, shareholder pressure, employee pressure, etc., they have to internalize those externalities. And instead of doing that themselves — by not producing stuff that creates carbon emissions, by telling their employees not to get on planes to visit clients, whatever — they buy carbon credits in a financial marketplace. They internalize the bad externalities by buying good externalities from the biochar people.

Money Stuff: Wirecard Had a Wild Run by Matt Levine ✉️