Derailment Risk: When the Climate Crisis Threatens Our Solutions Too
The consequences of climate change may gradually consume the economic and social resources we need to curb the climate crisis. Credible carbon markets therefore require a new economic mindset: they must recognize the true social and economic cost of emissions.
In the international dialogue on climate change, an especially troubling correlation is gaining increasing significance: over time, the consequences of the climate crisis may weaken precisely the capacity we need to address its root causes.
This phenomenon is called derailment risk—the risk that the sustainability transition itself could be derailed.
In their 2023 peer-reviewed study published in the journal Earth System Dynamics, Laurie Laybourn, Joseph Evans and James Dyke examined how climatic and ecological changes affect societies’ problem-solving capacity.
Their finding is clear: as the consequences of climate change worsen, they demand an increasing share of economic, social and political resources. Addressing food insecurity, health impacts, infrastructure damage, economic losses and social tensions may gradually divert attention and resources away from emissions reduction.
This can give rise to a self-reinforcing process: the more severe the climate crisis becomes, the harder it may be to curb it.
The topic was further examined in 2025 by new research conducted through a collaboration between the Strategic Climate Risks Initiative, University College London, the University of Exeter and the Institute for Public Policy Research. The report warns that the consequences of climate change and inadequately coordinated measures can create mutually reinforcing systemic risks.
This is no longer merely an environmental issue. Preserving our capacity to act on climate has become a strategic task in its own right. (https://doi.org/10.5194/esd-14-1171-2023 (.PDF))
Delay Further Exacerbates the Problem Caused by the Climate Crisis
In climate protection, time is not a neutral factor. Every postponed emissions reduction means additional greenhouse gases entering the atmosphere, where they influence the climate system over long periods.
Delay is therefore not simply the postponement of an investment. It increases the burden of later interventions while narrowing their possibilities.
The financial resources needed for climate protection cannot be secured from public funds alone. Mobilizing private capital is essential, and this requires economic incentives that finance actual climate performance.
This is where the role of a credible voluntary carbon market becomes particularly important.
The Carbon Market Must Break with Traditional Price Competition
One of the fundamental problems of the current voluntary carbon market is that its pricing is determined primarily by supply and demand, competition and the willingness of individual market participants to pay.
This traditional commercial mindset is unsuitable for adequately expressing the value of the social and economic damages caused by greenhouse gas emissions.
A carbon credit is not an ordinary commercial product. Avoiding emissions or removing them from the atmosphere is an environmental outcome whose economic significance cannot be determined solely by market bargaining.
According to OurOffset’s position, this way of thinking must fundamentally change.
A carbon credit is either an instrument representing credible, verified environmental value, or it cannot be considered a genuine carbon market value. Credibility is not a price category, and it cannot be replaced by marketing or a favorable market position.
For credible carbon credits, a uniform, scientifically grounded pricing basis is required.
The same unit of environmental value must carry the same price reference.
It is unacceptable that the economic value of the same global climate problem should be determined solely by the price at which a given market participant is willing to purchase a carbon credit.
The market’s traditional operation based on price competition does not solve this problem. On the contrary: competition over low prices can undervalue the true social and economic consequences of emissions.
The SLCI: A Scientifically Grounded Pricing Paradigm Shift
This shift in mindset is represented by the SLCI Credit Price Standard™ (Social Cost of Carbon-Linked Carbon Index) developed by OurOffset.
The SLCI establishes a scientific and economic price reference for carbon credits based on the Social Cost of Carbon (SCC).
The SCC estimates the economic and social damage caused by an additional ton of carbon dioxide emissions. The SLCI links this scientific-economic value to carbon credit pricing.
The basis of pricing is therefore not the momentary bargaining of market participants, but the scientific estimation of the social cost of emissions.
The SLCI documentation references, among others, earlier EPA estimates, the results of Resources for the Future and Nature (2022), the Bilal–Känzig 2024 research, and the findings of the Potsdam Institute and Nature (2025).
On this basis, the standard sets an indicative SCC range of USD 1,000–1,500/tCO₂ for the 2025 period. The documentation sets as targets a carbon credit price corresponding to at least 30–50 percent of the SCC by 2030, and to the full value of the SCC by 2035. (SLCI Credit Price Standard™ – SCC-based pricing)
One of the most important principles of the SLCI is that a uniform price reference aligned with social cost cannot be subordinated to traditional market price competition.
Carbon credits do not have to adapt to the low prices dictated by the market. The carbon market must adapt to the scientifically estimated social and economic cost of emissions.
This is not a simple price correction, but a paradigm shift in the operation of carbon markets.
The Role of Carbon Credits Is to Accelerate Climate Finance
The economic role of credible carbon credits cannot be limited to accounting for corporate emissions. One of the most important tasks of carbon finance is to genuinely mobilize the capital needed for climate protection investments.
A properly designed carbon market can generate funding for emissions reduction, methane emissions prevention, forest protection and carbon dioxide removal projects.
The use of carbon credits cannot, of course, replace companies’ own emissions reductions. As a complementary financing instrument, however, it can significantly expand the resources available for climate protection investments.
The point is not whether carbon credits can replace emissions reduction—because they cannot. The point is why we should not exploit the financing opportunities offered by a credible carbon market as efficiently as possible.
Derailment risk warns precisely that our time and room for maneuver may be narrowing. We cannot afford to keep climate finance confined within the constraints of traditional market price competition.
We Must Not Follow the Market—We Must Recognize Real Value
The climate crisis no longer threatens only the stability of environmental systems. It also tests the economic and institutional capacity of societies to act.
The question of financing climate protection can therefore no longer be postponed.
Credible carbon credits, transparent registries and scientifically grounded, uniform pricing can together create an economic infrastructure that facilitates faster financing of climate protection investments.
OurOffset is convinced that the future of the carbon market lies not in producing the cheapest possible carbon credits, but in consistently recognizing genuine environmental value.
Credibility is a fundamental requirement. And uniform pricing linked to social cost ensures that the economic valuation of carbon credits does not become detached from the real consequences of emissions.
Carbon credits do not have to conform to the constraints of the traditional market. The carbon market must finally recognize that emissions have a real social and economic price.
Because if the consequences of the climate crisis ultimately make our solutions unviable, then the most important question will not be how much it would have cost to act in time, but why we did not do so when we still had the opportunity.
Rampasek László Attila
OurOffset – Voluntary Carbon Registry
Scientific and Professional References
- Laybourn, L., Evans, J., Dyke, J. (2023): Derailment risk: A systems analysis that identifies risks which could derail the sustainability transition. Earth System Dynamics, 14, 1171–1182.
- Strategic Climate Risks Initiative (2025): Derailment Risk – How Climate Action Could Go Off Track.
- University College London (2025): Global efforts to avoid catastrophic climate change risk being derailed.
- SLCI Credit Price Standard™ – Social Cost of Carbon-Linked Carbon Index.
- Oxford Principles for Net Zero Aligned Carbon Offsetting (2024).
- UK Government – Principles for voluntary carbon and nature market integrity (2024).
