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What is the carbon budget?

In lots of climate literature and discussion you&#8217;ll see reference to the carbon budget. But what actually is it? And, what does it have to do with you? In this article, we&#8217;ll unpack the concept of the carbon budget, discuss why it’s important, and explain how this budget has the ability to affect your daily life.

Budgeting is a handy tool used by many, to ensure we are on track and can sustain our livelihoods. Whether or not you use a budget, their overall premise remains the same &#8211; an accurate budget can be used for projections to help us make decisions about our present and future behaviour based on what we know about our current situation. 
Just like individuals, the earth’s system has its own carbon budget &#8211; a budget that gives us insight into the atmosphere’s threshold for carbon emissions over a period of time.
Exceeding this threshold would result in global temperatures <a href="https://climateactiontracker.org/global/cat-thermometer/" target="_blank" rel="noopener">increasing to dangerous levels</a>. This budget therefore enables us to change action to ensure that we meet favourable projected scenarios and effectively remain within this budget to sustain ourselves. Although the carbon budget applies globally, not all countries and industries are adhering to it &#8211; some don’t like the idea of budgeting at all, and <a href="https://wedocs.unep.org/bitstream/handle/20.500.11822/37004/EGR21_ZNZ.pdf" target="_blank" rel="noopener">others are not really taking it seriously</a>. 
Almost every country in the world has ratified the <a href="https://ecologi.com/articles/climate-emergency/2-minute-brief-what-is-the-paris-agreement" target="_blank" rel="noopener">Paris Agreement</a>, which compels governments to set nationally-determined targets targeted at limiting global warming to well below 2°C, or as close to 1.5°C as possible, compared to pre-industrial levels. These targets were established by the <a href="https://unfccc.int/" target="_blank" rel="noopener">United Nations Framework Convention on Climate Change</a> on the basis of projections of future climate impacts associated with different amounts of global warming. These projections inform the threshold of the volume of greenhouse gases (measured in carbon dioxide equivalent) which can be emitted into the atmosphere &#8211; or in other words, our carbon budget.  
The <a href="https://www.ipcc.ch/sr15/" target="_blank" rel="noopener">IPCC’s Special Report on Global Warming of 1.5 °C</a> (2018), which specifically deals with impacts of 1.5°C warming versus other scenarios, gives a clear warning message that the less warming we have, the less we are exposed to the unpredictable and severe impacts of climate change. To achieve this aim, the Report found that greenhouse gas (GHG) emissions would have to halve by 2030 and drop to net zero by 2050. It’s an ambitious aim, considering the amount of current emissions in the atmosphere and our reliance on fossil fuels, but it is certainly possible. It requires governments, industries, and households to collectively and continually reduce emissions and ultimately change behaviour.  
One of the mechanisms which has started working to give effect to the findings of the Special Report is the <a href="https://sciencebasedtargets.org/" target="_blank" rel="noopener">Science-Based Targets Initiative</a> (SBTi). The SBTi helps businesses align their behaviour with a 1.5ºC future by providing clearly-defined pathways for companies to reduce their GHG emissions. Pathway targets are considered ‘science-based’ if they are in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement. The SBTi is one of the leading initiatives that enables the private sector to ensure a reduction of their GHG emissions and to set a net-zero target in line with a 1.5°C future.

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What does the carbon budget mean for individuals?

Carbon budgets continue to be a popular approach to frame the challenge of keeping global warming to ‘acceptable’ levels because it gives us <a href="http://tool.globalcalculator.org/" target="_blank" rel="noopener">something tangible to visualise and work with</a>. We need the climate budget to inform our decision-making and behaviour at a governmental, industry, and household level &#8211; otherwise we have no concept of what informs our actions to reduce emissions. 
The carbon budget also has the ability to demonstrate the effect of inaction, as it utilises climate projections to determine future scenarios. The idea of what a 2ºC or 3°C  temperature increase would look like <a href="https://interactive.carbonbrief.org/impacts-climate-change-one-point-five-degrees-two-degrees/" target="_blank" rel="noopener">paints a dismal picture</a>, and in many ways, keeps us on track to avoid projected disaster scenarios. <a href="https://www.ipcc.ch/report/sixth-assessment-report-working-group-3/" target="_blank" rel="noopener">The IPCC Working Group 3’s contribution to the Sixth Assessment Report</a>, published in April 2022, states that there is still time to limit the global temperature increase below 1.5°C. However, scientists warn that the <a href="https://www.gov.uk/government/news/window-for-climate-action-closing-fast" target="_blank" rel="noopener">window of opportunity is rapidly closing</a> and the situation is getting more urgent. At the launch of the Report, UN Secretary-General António Guterres said it was a “file of shame, cataloguing the empty pledges that put us firmly on track towards an unlivable world”. According to the <a href="https://www.unep.org/resources/emissions-gap-report-2021" target="_blank" rel="noopener">Emissions Gap Report 2021</a>, which provides an overview of the difference between where GHG emissions are predicted to be in 2030 and where they should be to avert the worst impacts of climate change, the emissions gap still remains large. Compared to previous unconditional NDCs, collective new pledges for 2030 reduce projected emissions by only 7.5% &#8211; whereas a 30% reduction is needed for 2°C (and 55% reduction for 1.5°C). As a whole, <a href="https://wedocs.unep.org/bitstream/handle/20.500.11822/36991/EGR21_ESEN.pdf" target="_blank" rel="noopener">countries are falling short of meeting their new or updated NDCs</a> and announced pledges with current policies.
However, the carbon budget shouldn’t induce fear, it should inspire behaviour change. There is a misconception that if we exceed our carbon budget, we are unequivocally doomed. Imagery and advertising of a ‘climate apocalypse’ with a countdown clock springs to mind &#8211; let’s be clear that exceeding our carbon budget does not directly translate to the end of the world. However, the world it would result in would be increasingly unlivable as time goes on as warmer temperatures will bring worse impacts that threaten lives, livelihoods, and economies.

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Should the world’s carbon budget affect everyday decisions?

Absolutely. 
The carbon budget can be interpreted as a broad framework under which a huge amount of climate-related decisions are made. We make decisions every day that ultimately have an effect on our climate, whether we are aware of them or not. At a global level, countries who are signatories to the Paris Agreement have an obligation to limit their carbon emissions, and can do so by setting their own carbon budgets to ensure they remain on track with their commitments. 
These global carbon budgets can be further divided into national emissions budgets where countries set their own climate mitigation goals, such as the UK, who are <a href="https://www.gov.uk/guidance/carbon-budgets" target="_blank" rel="noopener">the first country to set their own legally binding carbon budget. </a>Governments are urged to go beyond their current Paris Agreement commitments, which if left unchanged, would result in an expected<a href="https://www.unep.org/interactive/emissions-gap-report/2019/" target="_blank" rel="noopener"> temperature rise to 3.2°C this century.</a> Collective decision-making will impact the speed at which we will approach the carbon budget’s threshold, which is why ensuring that future decisions, <a href="https://www.theguardian.com/environment/ng-interactive/2022/may/11/fossil-fuel-carbon-bombs-climate-breakdown-oil-gas#Code-red" target="_blank" rel="noopener">specifically in the energy sector</a>, are made with the carbon budget in mind is absolutely key.

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While the idea of sticking within the parameters of our carbon budget might feel like a complicated ask at the household and individual level, it’s ironically anything but complicated. The best thing you can do to ensure we stay within our carbon budget is actually quite simple &#8211; limit your greenhouse gas emissions as much as possible in your daily life. 
Support businesses that align with the goal of a decarbonised future. It may seem like an indirect link but where and how you use your money has a tremendous impact on emission reductions. Some simple ways to ensure your money is put to good use on a daily basis includes <a href="https://ecologi.com/articles/blog/environmental-activism-your-first-steps" target="_blank" rel="noopener">investing your money in ethical pension funds and banking with organisations</a> that ensure your money is not supporting the fossil-fuel industry. 
The solutions to the climate crisis already exist, it’s just about ensuring that our actions align with our intentions. Every fraction of a degree that our Earth’s temperature increases matters, so it’s no surprise that the small actions we take each day really add up. You can be part of the solution through a variety of ways; like <a href="https://ourworldindata.org/food-waste-emissions" target="_blank" rel="noopener">reducing food waste</a>, introducing <a href="https://www.bbc.com/news/science-environment-49238749" target="_blank" rel="noopener">plant-based alternatives</a> into your diet, being more <a href="https://ecologi.com/articles/blog/3-steps-to-creating-an-energy-efficient-home" target="_blank" rel="noopener">mindful of energy efficiency</a> in your home, and opting for public transport as much as possible. Once you’ve reduced your <a href="https://ecologi.com/articles/product/carbon-footprinting-at-ecologi" target="_blank" rel="noopener">carbon footprint</a> to as low as possible, it’s appropriate to offset remaining emissions. Ecologi offers a variety of <a href="https://ecologi.com/projects" target="_blank" rel="noopener">reforestation and verified carbon offsetting projects</a> to enable you to take climate action, while supporting natural ecosystems and local communities through tree planting initiatives. 
While it’s imperative that we embed emission reduction activities into our daily lives, government buy-in on the road to decarbonisation is key. Collective action is a powerful thing, and <a href="https://ecologi.com/articles/blog/environmental-activism-your-first-steps" target="_blank" rel="noopener">environmental activism</a> in the climate space is one of the means in which we can ensure that our governments are paving the way for a sustainable future that does not exceed the carbon budget. <a href="https://ecologi.com/articles/blog/activism-how-the-drops-inside-the-ocean-are-breaking-down-the-dam" target="_blank" rel="noopener">Advocate</a> for the future that is important to you and support political parties who share your vision of a decarbonised future. 
<a href="https://ecologi.com/plan" target="_blank" rel="noopener">Sign up today to take real climate action with Ecologi</a>.

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UK Voluntary Carbon Market Guide: Best Practices for Climate Action

The voluntary carbon market plays an important role in corporate climate strategies – but its effectiveness relies on buyers doing due diligence and rigorous quality assessment on each project, as well as placing the purchase of credits in the right place in the climate journey.
To ensure meaningful climate impact, businesses must develop a comprehensive carbon strategy and find ways to fund only high-quality credits in the voluntary carbon market – and this guide shows you how to do so with Ecologi.

<h2>Table of contents</h2>
<ul>
<li>When to buy carbon credits</li>
<li>Our new carbon projects assessment framework</li>
<li>Ecologi&#8217;s core due diligence principles</li>
<li>How Ecologi scores and ranks carbon credit projects</li>
<li>Questions to ask your carbon credit supplier</li>
<li>Take action in the voluntary carbon market</li>
</ul>

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<h2>When should businesses buy carbon credits in the voluntary market?</h2>
Businesses must not use credits in place of making direct, measurable reductions in their emissions. Instead, follow these steps to ensure you buy your carbon credits on the right step of your corporate climate action journey, and in the right way:
<ol>
<li style="font-weight: 400;" aria-level="1">Measure your emissions first – to allow you to understand where your business’s emissions are coming from. 
</li>
<li style="font-weight: 400;" aria-level="1">Set science-based targets and work towards them – set ambitious targets aligned with the SBTi and compatible with the global 1.5ºC warming target.</li>
<li style="font-weight: 400;" aria-level="1">Beyond value chain mitigation (BVCM) – design your BVCM portfolio to work alongside your decarbonisation plan and address your unabated emissions in each reporting year. Align it with SBTi guidance and the Oxford Principles. </li>
<li style="font-weight: 400;" aria-level="1">Buy high-quality carbon credits – use this guide to ensure the carbon credits you buy meet rigorous quality standards. Remember, under the SBTi framework you’ll also need permanent carbon removal credits for neutralising your residual emissions when you reach your net-zero date.</li>
<li style="font-weight: 400;" aria-level="1">Disclose and report transparently – publicly disclose information about your carbon credit purchases, and clearly communicate the limited role of carbon credits in your broader sustainability strategy.</li>
</ol>

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<h2>Ecologi&#8217;s carbon project assessment framework</h2>
In April 2025, we published a report summarising how we assess carbon credit projects against our rigorous proprietary rubric. A snapshot of what goes into our carbon credit project assessment is below, or you <a href="https://cms-assets.offset.earth/app/uploads/20250428124112/Ecologi_Whitepaper_A4.pdf" target="_blank" rel="noopener">download the full whitepaper here</a>.

<h2>Carbon project due diligence: Ecologi’s core principles</h2>
At Ecologi, we maintain general due diligence principles which we apply universally across the voluntary carbon market, to support our efforts to supply only high-quality carbon credits.
<ul>
<li style="font-weight: 400;" aria-level="1">ICROA-endorsed standards only – we supply credits exclusively from carbon standards which are ICROA-endorsed.</li>
<li style="font-weight: 400;" aria-level="1">Responsive to ICVCM decisions – we support the ICVCM’s two-tick approach to providing CCP-Approval to project methodologies, and we go further still, to assess individual projects on their merits and limitations as well.</li>
<li style="font-weight: 400;" aria-level="1">Keep the carbon credit life cycle as short as possible – 75% of our credits in 2024 came directly from project developers and their nominated dispensaries (as opposed to intermediaries on the secondary market), maximising the proportion of purchase price which goes to the developer.</li>
<li style="font-weight: 400;" aria-level="1">Locally-appropriate projects only – we take care to ensure that supported projects are being applied in appropriate geographies, where they can have the greatest impact.</li>
<li style="font-weight: 400;" aria-level="1">Deep project-level scrutiny – our extensive assessment criteria are specific to each type of project, and we assess every project against these criteria, ensuring the project’s specifics have been taken into account.</li>
<li style="font-weight: 400;" aria-level="1">Methodological consensus – we synthesise data we receive from our partners Sylvera, BeZero Carbon, Calyx Global and Renoster) with our own in-house analysis to uncover where there is consensus about project quality, and improve confidence.</li>
</ul>

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<h2>How to evaluate carbon credits: Ecologi&#8217;s scoring methodology</h2>
We designed a three-layer assessment process which takes into account the merits and limitations of the carbon standard used, the carbon credit methodology used, and of the individual project design.
The tables below summarise some of the data inputs we use at each stage.

<h3>Assessment level: Carbon Standard</h3>
Examples: Gold Standard, Verra, Puro Earth, Isometric, Plan Vivo.

<h3>Assessment level: Methodology (or ‘Protocol’)</h3>
Examples: GS TPDDTEC, VM0048, ACM0002.

<h3>Assessment level: Project</h3>
Examples: GS 10790, VCS 1571.

Criteria in the assessment are categorised as either quality criteria or risk criteria, and are segmented by our three pillars of impact: Climate, Nature and People. Based on how it meets each criterion, the project gains points for quality criteria, and loses points for excess risk – ultimately giving a risk-adjusted value out of 100 for each of these pillars.
Having gathered our risk-adjusted pillar scores, we use our own unique scoring formula which weights the risk-adjusted Climate score of the project equally with the combined risk-adjusted Nature and People scores. The formula then produces an ‘overall’ score (also out of 100) for the project. In order to be supplied by Ecologi, projects must meet a minimum overall score of 80, and must achieve no lower than 65 in any given risk-adjusted pillar score.

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<h2>Key questions to ask carbon credit suppliers</h2>
Selecting the right carbon credit provider is important to help guide you to make informed choices as part of your corporate sustainability strategy. Before purchasing carbon credits, businesses should ask:
<h3>Project quality </h3>
<ul>
<li style="font-weight: 400;" aria-level="1">Do you assess/validate/underwrite project quality? If so, how?</li>
<li style="font-weight: 400;" aria-level="1">Do your projects get good ratings from the ratings agencies? If so, what ratings are they?</li>
<li style="font-weight: 400;" aria-level="1">Do you source credits directly from project developers, or from the secondary market?</li>
<li style="font-weight: 400;" aria-level="1">Do you monitor projects over time to ensure continued success, and how do you remedy it, if a project&#8217;s quality drops?</li>
</ul>
<h3>Due diligence</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">How do you ensure you are supporting the right projects in the right locations?</li>
<li style="font-weight: 400;" aria-level="1">How do you account for project permanence and mitigate risks?</li>
<li style="font-weight: 400;" aria-level="1">What makes your projects additional?</li>
<li style="font-weight: 400;" aria-level="1">How do you assess the project&#8217;s impacts on climate, nature and people?</li>
</ul>
<h3>Positioning</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">How do you contribute to the development of a high integrity voluntary carbon market?</li>
<li style="font-weight: 400;" aria-level="1">Do you align your portfolios with the Oxford Principles? If so, how?</li>
<li style="font-weight: 400;" aria-level="1">How do you reflect ICVCM guidance on carbon credit methodologies and technologies?</li>
<li style="font-weight: 400;" aria-level="1">Do you build multi-year portfolios that align to mid- &amp; long-term SBTs?</li>
</ul>
As the voluntary carbon market evolves, corporate buyers have the power and the responsibility to demand high-impact credits to drive real climate progress. This means buyers have a responsibility to do due diligence before placing an order for carbon credits.

<h2>Take action in the voluntary carbon market</h2>
As a business committed to corporate climate action, understanding the voluntary carbon market is essential for making informed decisions about carbon credits. Our comprehensive whitepaper provides deeper insights into creating an effective sustainability strategy.
<a href="https://cms-assets.offset.earth/app/uploads/20250428124112/Ecologi_Whitepaper_A4.pdf" target="_blank" rel="noopener">Download our full whitepaper</a> to learn how your business can navigate the voluntary carbon market with confidence.

<h2>Connect with one of our climate experts</h2>
Please complete our form to arrange a 30-minute discovery call to discuss your goals and get a tailored solution for your business.

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The Good News timeline

It’s not all bad. While there’s a lot of negative news about the climate, let’s not forget the good stuff. Find climate wins, reasons to be hopeful and plenty of positivity in our good news timeline.

What is the carbon budget?