Consumers will increasingly use their wallets to help fight climate change with carbon-offset
- Media Manager
- Jul 26, 2023
- 2 min read
Deloitte Insights
Written By: Ricardo Martinez, Val Srinivas, and Jill Gregorle
Published: July 27th, 2023
“Do you want a carbon offset with that?” More and more consumers may be asked this question when making travel arrangements, ordering food, or negotiating a new mortgage rate.
Carbon offsets will increasingly be embedded in many purchasing decisions that retail consumers make each day. Deloitte predicts consumer purchases of carbon offsets will become pervasive and grow into a nearly US$100 billion market in developed economies by 2030.
Deloitte expects new carbon-trading networks to emerge that cater to the heightened demand for tailored, localized, and niche actions to help mitigate climate change. There is already a growing appetite for products that have a sustainability label; roughly two-thirds of US consumers say they would pay more at the pump for gas that offsets its greenhouse gas emissions. Moreover, an international survey conducted by Shopify last year found that two-fifths of consumers say they would pay a higher price for climate-focused products. Demand for offsetting will likely only grow as younger people, who often voice a preference for sustainable products, gain purchasing power.
Several categories of consumer spending, including food, transportation, and entertainment, could easily incorporate an option to purchase carbon offsets. We estimate that a small percentage of these expenditures will include a supplemental offset, leading Americans to spend US$21.3 billion a year to mitigate the environmental impact of their purchases by 2030, adjusting for expected inflation. If these habits are mirrored in other developed economies, then global consumers in developed economies will collectively pay nearly US$100 billion to offset goods and services at decade’s end.
While there may be those who reject environment, social, and governance principles, the majority of Americans remain concerned about the carbon footprint of the items they buy.6 Despite the surge of inflation in 2022, the market for sustainable products accounted for 17.3% of purchases in the United States last year, according to Circana and the New York University Stern Center for Sustainable Business. These products experienced a five-year compound annual growth rate of 9.48%—nearly double that of conventionally marketed products—and consumer behaviorists do not expect those preferences to wane.
