Climate Finance – Taking Responsibility Beyond the Value Chain

It’s not about “offsetting” in the traditional sense, but about actively supporting global emission reductions—especially where they make the greatest difference.

This shift in language reflects a deeper transformation: moving away from the idea that we can pay our way out of responsibility, toward a shared understanding that we all have a role in enabling the global transition to a sustainable future.

By financing projects that reduce or remove greenhouse gases, we support sustainable development while empowering businesses and individuals to take tangible climate action. Investing in climate projects that are additional, verified, and long-term is both a way to mitigate the climate crisis and a moral imperative—especially for actors in high-income countries with historically high consumption-based emissions and greater capacity to act.

The Role of SBTi for Businesses

According to the Science Based Targets initiative (SBTi), climate finance should be viewed as a complement—not a substitute—for reducing a company’s own emissions. But its potential is significant: not only in accelerating global emission cuts, but also in supporting climate adaptation efforts in the regions hit hardest by climate change (SBTi, 2023).

What Are Climate Projects?

Climate projects are designed to reduce the concentration of greenhouse gases in the atmosphere. This can be achieved by:

• Avoiding future emissions
  Replacing fossil fuels with renewables, or preventing emissions from natural processes.
• Removing existing emissions
  Through methods like reforestation or carbon capture technologies (CCS/CCRD).

The market for climate projects is evolving rapidly—with new technologies, better monitoring, and greater transparency. However, the quality of projects still varies widely. Choosing certified projects under robust standards like Gold Standard is essential to ensure real impact.

Renewable Energy – Replacing Fossil Fuels

A clear example of an avoidance project is the transition from fossil-based energy to renewables such as wind, solar, or hydro. Today, a staggering 82% of global energy still comes from fossil sources (IEA, 2023).

By supporting wind power projects on the island of Aruba, for example, we help avoid emissions that would otherwise come from fossil-based electricity. The ten turbines supply around 12–14% of the island’s electricity needs and make renewable energy more accessible.

These projects are typically located where renewable energy is still too costly, infrastructure is lacking, or fossil fuel interests remain strong. This also ensures additionality—the project wouldn’t happen without external financing.

Biogas – Turning Waste into Energy

Another type of avoidance project captures emissions from biological waste and converts it into energy. This includes agricultural waste, landfills, or wastewater—sources of methane that would otherwise leak into the atmosphere.

Instead, the gas is captured and used as fuel—reducing emissions while replacing fossil energy.

Biogas projects often come with local benefits too: improved health, better waste management, and sometimes new income streams for communities in low-income regions.

Efficient Cookstoves – Small Changes, Big Impact

In many parts of the world, people still cook over open fires. This leads to deforestation, heavy wood consumption, and serious indoor air pollution.

Projects that introduce efficient cookstoves can have multiple benefits:

• Reduced demand for firewood → less deforestation
• Lower smoke exposure → better health, especially for women and children
• Saved time and effort → increased gender equality

These projects can be challenging, as they require behavioral change and education. While the results are harder to quantify, the potential for climate and social impact is immense.

Tree-Based Projects – Protection and Restoration

Forestry projects can both avoid and remove emissions. These include:

• Reforestation – replanting trees in deforested areas
• Afforestation – planting trees where there were none before
• Forest protection – preventing deforestation of existing forests

Forests are vital to the planet’s carbon balance—yet human activity has already reduced the number of trees by 46% since the dawn of agriculture (Crowther et al., 2015).

However, these projects are often complex to monitor, verify, and sustain long-term. It can also be difficult to get information about potential, both direct and indirect, negative impacts on the local population. That’s why GoClimate has chosen not to invest in forest-based projects—despite their potential—and instead focuses on reductions that are easier to measure and verify.

Carbon Removal Technologies – Solutions for the Future?

According to the UN’s climate panel (IPCC), billions of tons of CO₂ must be removed from the atmosphere this century to keep warming below 2°C. That’s why removal technologies are a fast-growing field.

Examples include:

• ClimeWorks, which uses giant fans to suck CO₂ directly from the air
• Biochar, produced by heating biomass without oxygen, locks carbon into the soil

The methods ClimeWorks use hold promise—but they’re still expensive. Biochar is somewhat cheaper, but still significantly more costly than traditional projects.

Scaling these technologies is also a challenge. And there’s a risk they may distract from what’s most urgent: cutting emissions today.

The Cost of Climate Finance

Since climate projects vary in nature and complexity, so do their costs. There is no universal price for one ton of CO₂. Instead, prices depend on the technology, region, administrative effort, and quality assurance involved.

Every project requires resources—for development, monitoring, and independent verification. A portion of the price goes to project developers, certification bodies, and third-party auditors. These are critical for ensuring the project delivers real climate benefits.

GoClimate works exclusively with projects that meet strict standards for transparency, effectiveness, and third-party certification. For years, we’ve only supported Gold Standard certified projects. This means we’re selective—not all projects qualify, and it’s our job to choose the ones that deliver the most climate impact per dollar invested.

Why Global Projects, Not Swedish Ones?

There are strong reasons to support projects in countries like India or Indonesia rather than Sweden. In many regions, renewable energy is still too expensive to build without support. Infrastructure or technical expertise may be lacking, or fossil fuels may dominate due to vested interests and lobbying.

These conditions make external support essential—this is additionality. While the same wind turbine could be built in Sweden, the marginal benefit is greater where fossil fuels like coal or diesel are being displaced, and where clean energy access can improve quality of life.

Until we achieve a fundamental global shift away from fossil dependency, we have a moral obligation to address all the emissions we still generate—and to some extent, the historical emissions tied to our lifestyles. Financially supporting effective climate projects—provided they’re high quality and properly certified—is one of the best tools available under the current systems, regulations, and frameworks.

Ready to Make a Difference?

Already know your company’s climate footprint? You can start financing certified climate projects through GoClimate right away. Not sure yet? We offer tools and guidance to help you measure your emissions—an important first step in taking climate responsibility.

Together, we can drive the global climate transition—through real action, here and now.