Summer Internship at Infinite Environmental Solutions: A Journey Into Carbon Credits and Sustainability

In my previous role as an engineer on large infrastructure projects, I was rewarded for reducing the carbon footprint of construction by replacing traditional materials such as steel and concrete in a building with timber or other sustainable materials. 

However, I had little knowledge about how the reduced carbon emissions are utilised, valued or traded in the broader market.

Furthermore, as sustainability is introduced as an important element in INSEAD's core MBA curriculum, it fueled my curiosity to understand carbon credit consulting and trading, leading me to join Infinite Environmental Solutions as a sustainability consultant for the summer.

Based in India's cleanest city, Infinite Environmental Solutions is a global carbon and sustainability consulting firm that provides advisory services, project implementation and development activities. I got an opportunity to interact with different teams, which helped me gain insights into the undertakings of each department (carbon offset project development, carbon trading, and sustainability assessment) and their interrelation to deliver comprehensive solutions.

Carbon pricing instruments cover around 24% of global emissions. The potential introduction of new carbon taxes and emissions trading systems (ETSs) could increase this coverage to almost 30%. I started my internship by developing working knowledge and the impact of one such tool called the Carbon Border Adjustment Mechanism (CBAM) introduced by the European Union aimed at achieving the EU's climate targets of reducing carbon emissions by 55% from the 1990 levels by 2030 and becoming carbon-neutral by mid-century.

The CBAM is a policy tool designed to curb carbon emissions by imposing fees on imported goods based on their carbon content. This mechanism aims to prevent carbon leakage, where companies relocate to countries with lenient emissions regulations to evade carbon costs in the EU. CBAM creates a global 'green' level playing field and promotes cleaner production practices while safeguarding EU industries from unfair competition.

I learned that CBAM could result in three significant outcomes. First, it has the potential to reduce carbon emissions by a projected 10-15% by 2030. Second, it may prompt other emerging countries to adopt carbon-taxing policies. Third, it might initially drive up the cost of certain commodities within the EU. 

Identifying stakeholders impacted by CBAM, such as EU importers, global exporters (especially in carbon-intensive industries like steel, aluminium, and fertilisers), and third-party verifiers, Aveg (strategic partner at the firm) and I brainstormed opportunities for collaboration. Aveg's guidance was crucial for understanding how and with whom alliances can be formed to facilitate the monitoring, measurement and preparation of CBAM reports.

I also suggested future strategies for how Infinite Environmental Solutions can support Indian businesses in preparing for CBAM compliance. This included developing in-house capabilities, offering consulting services to estimate CBAM-related costs, reviewing operations and supply chains for emission monitoring and reductions, and building technology solutions for carbon tracking and reporting.

This summer experience deepened my knowledge about the processes, challenges, and growth in the sustainability sector while sparking my curiosity to drive innovative tools or introduce new policies that can significantly reduce carbon footprints.

This internship experience was supported by the INSEAD Hoffmann Institute Impact Internship Stipend and gifts from alumni.