Source: AFP
President Joe Biden’s administration is set to unveil “safeguards” on Tuesday that it says will ensure carbon offset markets effectively reduce greenhouse gas emissions, a major victory for supporters of the controversial schemes.
Treasury Secretary Janet Yellen will unveil the administration’s first broad guidelines for “high-integrity” carbon markets, aimed at boosting confidence in a system critics have labeled “greenwashing.”
To transition to a low-carbon economy, “We need to use all the tools at our disposal — creatively, thoughtfully and at scale,” he will tell an event with other senior officials, including the White House’s senior adviser on the climate John Podesta .
“I believe harnessing the power of markets and private capital is critical. This includes efforts to develop voluntary high-integrity carbon markets.”
Carbon credits allow companies and countries to offset greenhouse gas emissions, with each credit representing the reduction or removal of one tonne of CO2, often in developing countries through projects to combat deforestation.
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The carbon offsets market is currently worth about $2 billion, but has come under heavy fire recently after research showed that claims of reduced emissions under the schemes are often grossly overstated — or simply non-existent.
Yellen will outline principles that emphasize integrity in three key areas: supply-side credits tied to actual emissions reductions or removals; demand-side corporate responsibility prioritizing emissions reduction; and market integrity through greater transparency and reduced complexity.
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The publication of the guidelines signals that the US government is throwing its weight behind controversial climate finance mechanisms.
Prominent proponents of carbon markets, including former US climate envoy John Kerry, argue that government funding alone is not enough to meet the Paris Agreement’s goal of limiting warming to 1.5 degrees Celsius.
Kenyan President William Ruto has hailed Africa’s coal sinks as an “unparalleled economic gold mine” with the potential to generate billions annually.
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The UN’s special envoy for climate ambition and solutions, business tycoon Michael Bloomberg, welcomed the announcement.
“These will help increase investment in projects that reduce emissions and help more businesses grow while reducing their carbon footprint,” he said in a statement with UN special envoy for climate action and finance Mark Carney and the Mary Schapiro, former president of American Securities; and exchange commission.
But scientists stress that the offset should not be used as a license to continue to pollute, as emissions must be cut by almost half this decade to meet global warming targets.
A recent global scientific review found that market-based approaches to forest conservation, including carbon offsets and deforestation-free certification schemes, have largely failed to protect trees or alleviate poverty.
Earlier this month, the United Nations introduced rules allowing people affected by carbon credit projects, mostly in the developing world, to file formal appeals.
Activities linked to carbon markets include the production of renewable energy, the protection of carbon-absorbing environments such as forests or peatlands, and the replacement of carbon sinks with cleaner alternatives.
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But as these programs have proliferated, allegations of exploitation or displacement of local communities have also increased.
Source: AFP