Size of the Voluntary Carbon Market: The voluntary market remains small as compared to the Cap and Trade market. The relatively smaller trading volume is due to the fact that it is driven only by voluntary wish to reduce/offset emissions. The small size of the market provides a minimum amount of funds, which is barely able to make any significant difference.
|Trading volumes in Compliance driven and voluntary market|
Quality of Offsets: There are no set guidelines or rules and regulations in the Voluntary market, quite unlike the compliance driven Cap and trade market. Consequently the demand for voluntary offsets is lower due to unestablished quality norms which also is the reason for the lower costs of Voluntary offsets. Due to the absence of any regulation or quality of offsets are lower and sometimes even ignore additionality of emission reductions.
Right to Pollute: The Cap and Trade mechanism has been faced with severe criticism by environmental groups comparing them to papal indulgences, "a way for the guilty to pay for absolution rather than changing their behavior". Nevertheless there is still a cap on the quantity of emissions permissible. In a voluntary market the amount of permissible emissions is limitless.
Types of Companies Offsetting: Only a few of the large corporate sectors invest in offsetting. The ones involved in offsetting and/or promising carbon neutrality overwhelmingly tend to be of a low carbon intensity as it will be cheaper and easier for such enterprises to reduce/eliminate their footprint. Ironically the larger and heavier industries responsible for the bulk of emissions have comparatively lesser contributions to emission reduction.