Critical or concerning? Cop28 debates role of carbon markets in climate crisis
- Media Manager
- Dec 13, 2023
- 2 min read
The Guardian
Written By: Patrick Greenfield and Fiona Harvey
Published: December 13th, 2023
Supporters say carbon credits can fund solutions, but others say they allow companies to avoid reducing emissions
Government officials, conservation organisations and industry groups have sought to revive confidence in the unregulated voluntary carbon market at Cop28 amid concerns it does little to mitigate the climate crisis or the destruction of nature.
Supporters of carbon markets say that through buying high-quality credits, countries and companies can transfer some of the billions of dollars required to fund nature-based solutions, support Indigenous communities, phase out coal power, and pay for new renewables in developing countries. Initiatives are under way to certify successful carbon projects and curb greenwashing claims from companies that buy credits, although there is disagreement about the appropriate role of offsets in a company’s sustainability efforts.
The sector is wrestling with human rights concerns, evidence that many carbon credits are largely worthless, and a lack of clarity about financial flows. Demand for carbon offsets has collapsed in recent months after peaking at $2bn in 2021. Many speculators could lose billions following the slump as major companies drop “carbon neutrality” claims using offsets.
At the climate summit in Dubai, the US climate envoy, John Kerry, the EU commission president, Ursula von der Leyen, and the former UK prime minister Tony Blair were among those throwing their weight behind efforts to revive the market as a way of funding environmental action. While acknowledging flaws, Kerry told a Cop28 event that it could become “the largest marketplace the world will have ever known”. The World Bank president, Ajay Banga, told an event with von der Leyen that there was no other way for scaleable resources to reach developing countries.
Blair spoke at an event with the Guyanese president, Irfaan Ali, in support of selling carbon credits derived from protecting Guyana’s forests. Guyana is one of the few Amazon countries to have kept the vast majority of its forest intact, and it has signed a $750m carbon credit deal with the US petroleum company Hess Corporation, although questions have been raised about the environmental benefits the credits represent.
Concerns have also been voiced about the role of carbon markets in formal climate talks. Ahead of Cop28, an EU memo raised concerns that the US was pushing voluntary carbon market initiatives for formal inclusion in the Paris agreement’s carbon market which, it warned, could undermine the ambition of efforts to limit global heating.
