As the world accelerates towards ambitious net-zero targets, the economics of climate change have become more urgent, complex and critical to address. This is where the importance of carbonomics comes into play – a discipline that brings together carbon and economics to better understand, manage, and mitigate climate change.
What is carbonomics?
Carbonomics is a framework for viewing the global economy through the lens of carbon. It is the idea that as the world transitions to a net-zero future, the value and price of carbon will fundamentally reshape business, finance and investment.
Historically, energy and industrial systems have failed to account for the environmental harm caused by burning hydrocarbons. By contrast, carbonomics aims to correct that by internalising these external costs, making sustainable choices more economically viable.
One of the key components of carbonomics includes carbon pricing, through taxation and cap-and-trade systems, governments can create financial incentives for reducing their carbon footprint. Others include renewable energy investments, energy efficiency, green finance, carbon offsetting, sustainable development policies, technological innovation and corporate sustainability.
The evolving role of offsetting
In response to climate pressures, many companies, organisations, cities, and financial institutions are using voluntary carbon offsetting – payment to receive credit for a certified unit of emission reduction or removal carried out by another actor.
While current best practices address some known risks (e.g. improper carbon accounting, re-release of stored carbon, negative unintended impacts on humans or ecosystems), they often fall short of delivering the level of offsetting needed to achieve true net zero.
Today’s offsets are mostly emission reductions – an important step, but insufficient in the long run. Carbon removals, which extract CO2 directly from the atmosphere, are critical. Offset users must shift towards removal-based offsets to remain aligned with the goals of the Paris Agreement (agreement to limit global warming to well below 2°C, preferably to 1.5°C).
Despite advances in offsetting frameworks and ethical approaches to carbon management, carbonomics remains an underdeveloped and underexplored field. Broader exposure is essential – across academia, industry, government, and education – so that future generations are equipped to make informed and impactful climate decisions.
The UK’s first Institute of Carbonomics
The UK’s first Institute of Carbonomics, recently launched by the University of Derby, is a groundbreaking research institute dedicated to reshaping how businesses reduce emissions and transition to a low-carbon economy.
This pioneering institute, part of the Derby International Business School and housed in the University’s new Cavendish Building, will act as a global catalyst to support government and businesses of all sizes to work together. It aims to accelerate innovation in carbon economics, transform supply chain practices, and drive measurable, real-world solutions that deliver carbon reduction at scale.
The Institute will drive research and innovation in sustainable finance and carbon accounting, support the integration of sustainability into business models, develop talent pipelines for environmental finance and green innovation and inform climate policy and provide insights into financial climate risk. In doing so, it aims to shape the next generation of carbonomics leaders and practitioners.
The importance of now
In the UK, it is more important than ever to reach net-zero carbon. According to the Met Office, the summer of 2025 was the hottest on record, with average temperatures exceeding previous highs. Climate change is not a future concern – it is a current crisis. And it demands economic tools capable of reshaping behaviour at scale.
Yet despite global efforts, carbon offsetting remains a misunderstood and inconsistent area. While many organisations rely on voluntary carbon credits to meet climate targets, current practices often fall short of delivering lasting results.
This is where the Institute of Carbonomics will lead change. Drawing from the Oxford Principles for Net Zero Aligned Carbon Offsetting (2020), our research and teaching focus on:
- Cutting emissions and using high-quality offsets
- Prioritising carbon removals over simple emission reductions
- Supporting long-lived carbon storage methods
- Aligning offsetting strategies with evolving scientific and ethical standards
As these principles highlight, the shift from emissions reduction to active carbon removal is essential to reach, and sustain, net zero. The Institute of Carbonomics will be at the forefront of educating, informing, and enabling this transition.
Research and innovation in action
The University of Derby’s Zero Carbon Research Theme supports interdisciplinary projects at the forefront of climate action. These include:
Nature-Based Solutions
- Coral Conservation: Coral reefs are significant carbon sinks and critical to ocean health. Professor Michael Sweet’s research team has pioneered lab-based coral spawning techniques, now used internationally, alongside bio-enhancement methods to improve coral survival and reef restoration.
- Peatlands Management: Peatland ecosystems play a vital role in carbon storage. Restoration efforts are being expanded to improve carbon sequestration and biodiversity outcomes.
- Enhanced Rock Weathering (ERW): A highly desirable carbon capture method involving the application of finely ground silicate rocks (e.g. basalt) to agricultural soils. The University’s ERW research team is exploring the carbon sequestration potential of local mining by-products. Initial findings suggest that ERW could sequester between 6–30 million tonnes of CO₂ annually in the UK by 2050.
These initiatives exemplify the integration of scientific research with practical climate solutions.
A global vision, rooted in Derby
The establishment of a Founding Chair in Carbonomics, based within Derby International Business School, further reflects the University’s commitment to leadership in sustainability. As a first-of-its-kind role in the world, it will draw on each of the University’s core academic themes – from Data Science to Creative Industries – to create a holistic approach to tackling climate change.
Students at Derby International Business School will also benefit from honing their skills in our Financial Markets Laboratory, which occupies a prominent, central location in The Cavendish Building – the new state-of-the-art home of the Business School. Academics also research live market conditions here, weaving together both our research and teaching commitments in a real-world environment. Creating a partnership of shared expertise, shared resources, and shared opportunities will enable organisations to deliver the change both now and in the future.
Leading the future of carbonomics
The challenges of climate change are vast - but so are the opportunities for innovation, leadership, and collaboration. Through the Institute of Carbonomics, the University of Derby is proud to lead the way in redefining how we understand, value, and manage carbon in our economy.
Find out more about the University of Derby’s Institute of Carbonomics
For further information, contact the press office at pressoffice@derby.ac.uk
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