- Top US climate envoy John Kerry has announced an effort to allow companies to use carbon offsets.
- The plan would create revenue to fund developing country moves toward clean energy.
- Companies could count the resulting emission reductions towards their own targets.
SHARM EL-SHEIKH, Egypt — The United States wants to unlock tens of billions of dollars of private capital for the clean energy transition in developing countries by increasing carbon offsets for companies trying to meet their climate goals.
The voluntary program, the Energy Transition Accelerator, would allow companies that finance the decommissioning of coal-fired power plants and that finance renewable energy projects to count the resulting reductions in greenhouse gas emissions in their own climate goals.
“No government in the world has enough money to do this job,” top US climate envoy John Kerry said Wednesday during an event at the UN COP27 climate summit in Sharm el. -Sheikh, in Egypt, surrounded by supporters of Microsoft, Pepsi, the Rockefeller Foundation and the Bezos Earth Fund. “This is an essential tool that will complement, not replace, other sources of climate finance.”
The idea is already dividing climate groups, with one activist shouting at Kerry to “promote fake solutions” before security officials escorted him from the event.
Voluntary carbon markets allow polluters to buy credits that are supposed to represent one tonne of carbon dioxide emissions avoided or removed from the atmosphere. But numerous surveys have found that projects ranging from protecting forests to building renewable energy either failed to reduce emissions or would have been completed without issuing credits anyway, ultimately negating their climate impacts.
“Carbon markets have, at best, a heavy track record of actually reducing carbon emissions, and there are a number of ways this program could go wrong,” said Cherelle Blazer, director of the international climate and policy campaign. of the Sierra Club, in a press release.
Kerry acknowledged that past abuses had discredited the use of carbon credits, but said the initiative would not repeat those mistakes. There will be strict standards to ensure companies are not buying carbon credits instead of decarbonizing their own operations and supply chains, he said. The United States will also consult with organizations that attempt to improve the scientific integrity of carbon credits.
Fossil fuel companies cannot participate and companies must have their net zero targets verified by the Science Based Targets initiative, which requires companies to aim for a 90% or more reduction in emissions before relying on carbon offsets to make up for the rest. The UN released its own guidelines on Tuesday on net zero claims by companies to “greenwash” police.
“Although the announcement offers some improvements to the current market – such as support for adaptation and the exclusion of fossil fuel suppliers – it should not be considered a climate finance tool if used to generate offsets. carbon,” said Jonathan Crook, policy expert at Carbon Market Watch, a watchdog group. “Buying emission reductions from developing countries is not the same as channeling climate finance and raises questions about who can count the reductions.”
The announcement came on “Finance Day” at COP27 and after a UN-backed report estimated that developing and emerging economies, other than China, needed $1 trillion a year from rich countries, development banks and investors to meet the Paris Agreement goals of limiting global warming to 1.5 degrees Celsius above pre-industrial times. (The planet has already warmed about 1.2 degrees since pre-industrial times.)
Exceeding the 1.5 degree threshold would mean catastrophic damage to humanity and the environment, including deadly storms, heat waves and drought.
More than a decade ago, rich countries pledged to provide $100 billion a year by 2020 to poorer countries to build clean energy and other infrastructure that reduces emissions and is more resilient to impacts of the climate crisis. This promise has not been kept, with funding for adaptation still to be estimated at five to ten times higher than it currently is, according to the UN.
Developing countries also want to be compensated for the losses and damages they have suffered from pollution caused by rich countries after more than a century of using fossil fuels to industrialize their economies.
These huge financing needs cannot be met with public funding alone, Kerry said, adding that is why voluntary carbon markets should play a role. He said the Energy Transition Accelerator does not exempt any nation or company from its obligations. Kerry said he hoped the plan could be developed over the next year, in time for the 2023 UN climate summit in Dubai, United Arab Emirates.
African nations on Tuesday unveiled their own carbon market initiative, aiming to provide 300 million carbon credits each year by 2030 and raise up to $6 billion. Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All, said the market could spur clean energy investment on the continent, where so many lack access to electricity. electricity, including 90 million in his country of origin. Nigeria.