CRAP 29's Big Achievement: A Facelift For The Faceplant Known As "Carbon Markets"
It was once among the most promising ways to funnel climate finance to vulnerable communities and nature conservation. The trading of carbon credits, each equal to a tonne of CO2 that has been reduced or removed from the atmosphere, was meant to target quick, cost-effective wins on climate and biodiversity. In 2022, demand soared as companies made environmental commitments using offsets, with the market surpassing $2bn (£1.6bn) while experiencing exponential growth. But the excitement did not last.
Two years later, many carbon markets organisations are clinging on for survival, with several firms losing millions of dollars a year and cutting jobs. Scandals about environmentally worthless credits, an FBI charge against a leading project developer for a $100m fraud, and a lack of clarity about where money from offsets went has caused their market value to plunge by more than half. Predictions that standing rainforests and other carbon-rich ecosystems would become multibillion-dollar assets have not yet come to pass.
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The potential size and impact of any country-level market is also unclear. Norway has reserved up to $740m (£590) for purchases under the Paris carbon market, signing agreements in Baku with Benin, Jordan, Senegal and Zambia, but there are questions over how many other developed countries will make purchases despite predictions it could soar into a multibillion-dollar market. Then, there is the issue of environmental integrity, which has repeatedly undermined faith in carbon credits, including the previous UN carbon trading system. A new study in Nature Communications published during the first week of Cop29 found that less than 16% of carbon credits issued represent real emissions reductions, meaning that the vast majority are hot air. Moments after governments approved the Paris carbon trading system, observers warned that the rules were not strict enough to avoid similar issues.
Dr Lambert Schneider, one of the co-authors and a senior researcher at the Oeko-Institut, said these problems would undermine the Paris agreement if they spilled into the official UN system. “The available evidence suggests that many carbon credits are not backed by any actual emission reductions. If these quality issues continue under article 6, this could undermine our efforts to achieve our climate targets. It is critical that we fix the integrity issue of the market,” he said. “We currently see proposals on the table that would credit the natural absorption of carbon dioxide by forests. But these removals occur anyways and not because of any human intervention. If these credits are used by buyers to emit more, this would result in more carbon added up to the atmosphere. And the potential for issuing such credits is very large,” he said.
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https://www.theguardian.com/environment/2024/nov/24/cop29s-new-carbon-market-rules-offer-hope-after-scandal-and-deadlock