There are at least two reasons:
1. Putting a price on carbon changes how we act
See this passage from Second Nature, the non-profit that organizes 650+ colleges commitments to carbon neutrality.
Neutrality First Approach
Some institutions reverse the usual carbon management hierarchy and achieve carbon neutrality through offsetting before beginning other mitigation efforts. These institutions feel that the threat of climate change is so pressing that it is their moral responsibility to become immediately carbon neutral. Typically, such institutions have a manageable carbon footprint and also commit to reduce the number of offsets they purchase each year through on-campus mitigation efforts.
On that point, it is important to keep in mind that the very act of offsetting puts a price on GHG emissions. This price signal can drive internal emission reductions, because every ton of carbon that is not emitted represents one less offset that needs to be purchased. The short-term purchase of offsets can be an effective way to drive real reductions in global GHG emissions; internalizing the immediate costs of GHG emissions while accelerating the longer-term innovation in direct GHG emissions reduction techniques.
Source: Carbon Offset Guidance Draft Version for Public Comment – July 2016
Here’s a more fun way to explain the same concept...
Imagine a person who swears like a sailor:
His wife says, “Ed, could you please stop dropping the F bomb? We have kids!”
“F* you Sharon! I’m a grown man! I can F’in use whatever F’in language I please! For F sake!”
“Uh, not if you want me to continue being your wife you won’t. You need to ship up or shape out big boy. If you don’t stop I’m leaving.”
Okay, now imagine he agrees with her. He wants to change his ways.
“You know what honey, I promise to change. Dagnabit, I’m going to try my darndest to leave my old swearing behind. I promise to change. Golly, please don’t leave me!”
The days and weeks and months pass… No matter how hard poor old Ed tries to reform his ways he slipps back into old patterns. His wife tried to remind him but she got exhausted.
This story could have been different:
“Ed, we’ve talked about this before. Why would this time be any different? I want you to put $10 cash into this jar every time you swear.”
“$10 dollars now.”
At first, it’s painful for Ed. Every time he pulls out a nice, crisp $10 bill it hurts. He thinks of the beer he could have had with his friends. The money makes it real for him though.
And wouldn’t you know it! Pretty quickly he’s changed his ways.
Now, Sharon and Ed are happy. They’ve rediscovered the intense passion they had for each other in younger days. Ed even trimmed up his hair and learned how to play cello.
2. It helps people get traction psychologically
Dave Ramsey wrote the bestselling book Total Money Makeover. The book helps people get out of debt and build financial wealth.
Imagine a common example of his audience -- a clerk at something like a gas station who makes $8.50/hour. Somehow they’ve accumulated $25,000 of credit card debt. They see no way out of the hole, and they sink into depression. This is the kind of situation that causes people to turn to drugs and kill themselves either slowly or quickly. It’s heart wrenching.
Along comes Dave Ramsey. His main technique for helping people get out of debt is called the “debt snowball.” He tells people to list their debts from smallest to largest -- regardless of interest rate.
So, maybe you owe grandma $75. You owe a friend $250. You own $750 on one credit card and $1250 on another. Then maybe you own $5,200 on your car loan. And $20,000 for your college loans.
You list these debts in order and put them on your refrigerator. You make minimum payments on all of them, and whatever extra money you have you put towards the smallest.
Quickly the small ones get paid off.
Then you take the money you were paying towards the small ones and apply it to the larger ones.
As you cross off the debts with your Sharpie marker you feel a sense of accomplishment and momentum. That’s why he calls it a “debt snowball.” You roll the snowball down the hill, and it gets bigger and bigger and bigger.
A lot of people call into his radio program and say, “Dave, that’s dumb. Why wouldn’t I pay off my high interest loans first? Yeah I owe grandma $75 but she doesn’t charge interest. Neither does my friend. The $750 I own on one credit card charges 8% interest! Doesn’t it make sense mathematically to pay off high interest loans first?”
Dave gets this question a lot, because it’s a reasonable question.
Yes, paying off the high interest loans first makes sense mathematically, but for most people it doesn’t make sense psychologically.
That is, most of us won’t feel the same sense of momentum we would if we had ordered the debts small to large.
Instead, people try to pay off the big high interest debts first -- month after month after year after year. It feels like shooting spitballs at a dragon. They feel like they are stuck and sinking deeper. Sadly, a lot of these people just give up.
Instead, list those debts small to large. Knock out the little ones. Feel progress and momentum. Roll the snowball. Increase confidence. And take back your life from the creditors.
A similar thing applies to the climate crisis. Like debt that’s gotten out of control, it feels overwhelming. We don’t know where to start. When we do start we aren’t consistent. We try some things then give up when we don’t feel momentum. In fact, we become depressed when we see the opposite of momentum -- we ride our bike everywhere but see more and more people buying SUVs.
You get the picture.
Instead, for a reasonable investment you can be carbon neutral. It’s solid ground! Something you can stand on. Something to never lose. A point from which you can only progress.
And then you see the momentum. It’s not like the current confusing situation -- where some friends swear off meat, others don’t use plastic bags, others ride their bike, others give up flying.
Instead, you see a house go carbon neutral. Then another. Then another. Then another. Once they are technically neutral (i.e. they pay in cold hard cash to offset the damage they are doing to the Earth) then they can reduce emissions in whatever way their heart pleases.
In fact, reducing is a critical component of all of this and can’t be forgotten. Measure. Offset. Reduce.
When someone sees the full scope of the damage, and they can also see how they can make it right today, that’s when they decide to become carbon neutral now and forever. Not simply to stop using plastic bags, or whatever, here and there… but to be completely carbon neutral now and forever.