Carney’s carbon offset taskforce unclear about environmental integrity and effectiveness of private sector market

As Mark Carney, the UN special envoy for climate action and finance, unveiled plans for a new “taskforce” to scale up the private sector voluntary carbon market, campaigners warn key criteria for carbon offsets, that could be effective and might improve environmental integrity, are missing.  The taskforce includes some of the world’s largest carbon emitting companies, including EasyJet, Boeing, BP, Shell, Total, and Tata Steel. There are no green groups among its members.  Businesses increasingly realise they are expected to take carbon seriously, and set net-zero targets, as far ahead as possible. And they want the cheapest way possible to do this. Hence the drive for cheap carbon credits, which are often from developing countries, such as tree-planting, ecosystem restoration, energy efficiency or waste management. Demand for carbon credits is anticipated to rise, as companies continue to grow and emit more carbon (instead of genuinely reducing their emissions, themselves).  Climate campaigners warn these ineffective carbon credits could give polluters a free pass. They also help to delay real cuts in companies’ carbon emissions, or investment in the necessary technologies. What is needed is real carbon removal.
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Carney’s carbon offset taskforce ducks environmental integrity questions

27/01/2021(Climate Change News)

By Chloé Farand

As the UN special envoy for climate action and finance unveils plans to scale up the voluntary carbon market, campaigners warn big gaps remain on quality standards

As Mark Carney presented the world’s top political and business leaders with a blueprint to scale up the voluntary carbon market on Wednesday, campaigners warned key criteria to improve environmental integrity were missing.

At the annual meeting of the World Economic Forum, in Davos, Carney, the UN special envoy for climate action and finance, presented the recommendations of a private sector-led taskforce to respond to an anticipated boom in demand for carbon offsets.

The final report, which was still being designed on Wednesday morning, was not circulated to taskforce members before the launch, contrary to expectations they would be briefed ahead of the event.

“The voluntary carbon offset market… is complementary to companies’ efforts to reduce absolute emissions… [that] only then look to offset,” Carney told the World Economic Forum. The market would help “maximise” the use of the world’s remaining carbon budget to meet its climate goals, he said.

He described the market as “catalytic” to finance projects in emerging and developing economies and “breakthrough technologies” as well as harnessing “potential enormous co-benefits” for biodiversity for example. “It is one piece of the puzzle. We do need this market.”

Chaired by Bill Winters, group chief executive of Standard Chartered, and sponsored by the Institute of International Finance (IIF), the taskforce includes some of the world’s most polluting companies: airline easyJet, plane manufacturer Boeing, oil giants BP, Shell and Total, and steel producer Tata Steel. No green groups are represented among its members.

With carbon neutrality pledges becoming the benchmark for climate ambition, businesses around the world are looking to offset the emissions they cannot cut and for cheaper ways to meet their climate goals.

Offsets allow companies to compensate their emissions by financing a carbon-cutting projects, often in developing countries, such as tree-planting, ecosystem restoration, energy efficiency or waste management.

Demand has risen rapidly in the past two years and is expected to soar in the near future. The taskforce forecasts supply of carbon credits will need to increase 15 fold between 2019 and 2030 to keep up.  [ie. there will be a lot more carbon emissions from companies etc, and they want to find a way to pay schemes somewhere else to mop up the carbon they are adding … That just cancels out the carbon reductions others achieved … AW comment].

Its report identified ways to bring coherence to what is currently a fragmented market. But it said little on how to ensure projects financed through the market deliver genuinely additional emissions reductions.

“The question is what are we scaling? And what do we mean by offsetting?” Owen Hewlett, chief technical officer at Gold Standard, one of the main certifiers of voluntary carbon market projects, a taskforce member, told Climate Home News.

“If you scale a bad thing, it doesn’t matter how big you make it, it’s still bad. And I still don’t feel like the definition of offsetting is entirely clear,” he said. “I find that fairly astonishing. We’re trying to scale this specific instrument that we haven’t defined.”

The taskforce said the recommendations were “the beginning of a longer process”. In consultation with other groups, it would work to establish core carbon principles and quality standards and provide guidelines on how and when companies should use offsets.

The tastkforce recommended the creation of a governance body that could oversee the implementation of quality benchmarks, such as excluding old projects where verification is no longer possible, for example.

The initiative is already facing a backlash from climate campaigners, who warn it could give polluters a free pass.

An open letter to Carney signed by 47 researchers, academics and campaigners ahead of the launch accused the initiative of trying to “minimise the cost of compliance for private corporations” at the cost of environmental integrity.

Agustin Silvani, senior vice president of conservation finance at Conservation International, said the taskforce recommendations were “on the right path” but there was “a long way to go” to narrow down what constitutes a quality offset.

“The role of civil society is to continuously be pushing the market higher for quality,” he said.

One concern is how to avoid double counting, with the company and host country both taking credit for emissions cuts. Campaigners stressed that the taskforce should not be allowed to set the rules on this issue.

For Hewlett, an independent process driven by civil society should define what constitute a quality offset to avoid the private sector self-regulating. This, he said, would be an opportunity to think more holistically about the type of projects to back.

In the US for example, organic soil carbon sequestration credits are in high demand, but quality offsets should drive sustainable agricultural practices that ensure food security and protect biodiversity as well as storing carbon, Hewlett said.

“The taskforce isn’t articulate, or nimble enough to have thought that way,” he added.

France and UK lead push for climate finance to restore nature

The focus on forests and land use credits is noticeable. In 2019, forestry and land use credits represented more than 56% of the value of transactions on the voluntary market, according to data from Ecosystem Marketplace.

To cut emissions to net zero, the taskforce urged a significant increase in the proportion of projects which remove or sequester carbon in trees and soils.

Such nature-related projects “often have high co-benefits for nature and society such as positive impact on surrounding biodiversity, water quality, soil quality, and livelihoods,” it added.

But while these solutions have a considerable role to play in meeting climate goals, sequestrating carbon in ecosystems should not replace real emissions cuts, said Frédéric Hache, executive director of NGO Green Finance Observatory.

“We need to sequester past emissions that are already in the atmosphere whereas offsetting by definition is about future emissions. The whole point of an offset is that an entity keeps emitting. There is a striking lack of binding and credible measures to actually prioritise emissions reductions,” he said.

For Katie Kedward, economist and policy fellow at Institute for Innovation and Public Policy, the biodiversity co-benefits that result from the voluntary carbon market are “a strong assumption” with no evidence offsets help enhance biodiversity and ecosystem health.

“It’s important not to forget the huge flows of finance currently facilitating the drivers of biodiversity loss,” she said, warning against the market being perceived as an adequate substitute to conservation.

She urged the taskforce to develop “robust standards” on multiple ecological criteria, including biodiversity protection, rather than on carbon alone.

https://www.climatechangenews.com/2021/01/27/carneys-carbon-offset-taskforce-ducks-environmental-integrity-questions/

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The open letter:

https://greenfinanceobservatory.org/wp-content/uploads/2021/01/Scaling-up-GFO-analysis-final4.pdf 

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Comment from an AirportWatch member:
There are various problems
1. How to ensure that carbon offsets offer additionality and no double-counting, including ensuring that old, worthless credits are not permitted.
It is thought that, within CORSIA  airlines can only use credits issued after 1st Jan 2016, and they can only be used for compliance up until 2023, not indefinitely. Specifically on the Clean Development Mechanism, ICAO also says that afforestation and reforestation projects are ineligible. But there is also a large and growing voluntary offset market, that is not well regulated.
2. How to ensure that offsetting doesn’t allow polluters – like airlines – to put off investing in the necessary developments to cut their own CO2 emissions.  Offsets are cheap, while in-sector CO2 reductions are expensive.
But to stabilise global temperatures, all sectors in all countries need to achieve net zero emissions. Any offsetting which is about paying someone else, in another sector or country, to cut emissions can’t achieve that.  Before long, offsets will run out.
3. How to ensure investment in long-term carbon dioxide removals (CDR), by carbon capture and storage (CCS) which is expensive and difficult, but will be essential for the small amount of emissions that really can’t be reduced to zero. The removals should also included already-accumulated CO2, in the atmosphere already.
Something that the Greenpeace CDR report highlighted was the companies like Shall are arguing that continued fossil fuel extraction is justified, and should not be considered a stranded asset, because some time in the future CCS technology will balance it out.  Perhaps, but unlikely.
That is not an acceptable way to think about CCS.  The report identified airlines as being the largest users of CDR when measured as a % of current emissions based on a lowest-cost pathway to net zero.
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The big problem is how to stop airlines being able to offset, and continue to emit more carbon and continue to make profits, because the cost of the carbon they emit is too cheap and no price penalty.