Climate Change Committee recommendations to government on voluntary carbon markets and offsetting
The Climate Change Committee (CCC) has a new report, called “Voluntary Carbon Markets and Offsetting”. It looks at the evidence on the risks and opportunities presented by voluntary carbon markets and ‘offsetting’, in relation to progress to “Net Zero” in the UK and beyond. The role of voluntary carbon markets can only be limited. The CCC says that before growing voluntary carbon markets, Government must put in place stronger guidance, regulation and standards to ensure purchase of carbon credits is not used as a substitute for vital direct business emissions reduction – also to improve the integrity and transparency of carbon credits. In the absence of these measures, there is a real risk that voluntary carbon markets slow progress towards Net Zero or damage other priorities such as climate adaptation and biodiversity. The CCC recommends that business should use measures with high integrity, but focus on actually cutting their direct emissions. Voluntary carbon markets should result in lower overall CO2 emissions. They say carbon credit standards should better consider biodiversity and other ecosystem services, especially in biodiversity priority areas. Climate and nature should both be protected together.
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Voluntary Carbon Markets and Offsetting
Climate Change Committee website.
October 2022
https://www.theccc.org.uk/publication/voluntary-carbon-markets-and-offsetting/
1. Outline
This report looks at the evidence on the risks and opportunities presented by voluntary carbon markets and ‘offsetting’ to progress to Net Zero in the UK and beyond. Voluntary carbon markets are markets where carbon credits are purchased, usually by organisations, for voluntary use rather than to comply with legally binding emissions reduction obligations. Voluntary carbon markets are growing, driven in part by demand from businesses looking to ‘offset’ their emissions.
2. Key messages
High-integrity carbon credits purchased by businesses can play a small but important role in supporting the transition to Net Zero. But before growing voluntary carbon markets, Government must put in place stronger guidance, regulation and standards to ensure purchase of carbon credits is not used as a substitute for direct business emissions reduction, and to improve the integrity and transparency of carbon credits. In the absence of these measures, there is a real risk that voluntary carbon markets slow progress towards Net Zero or damage other priorities such as climate adaptation and biodiversity.
We make three broad recommendations:
1. Encourage businesses to support high integrity nature-based and biological solutions and engineered removals, while focussing on achieving direct business emissions reduction.
2. Continue efforts to protect and raise the integrity of carbon credit projects, in the UK and globally, and to ensure voluntary carbon markets are resulting in lower overall global emissions and positive wider impacts.
3. Support the modest but useful role voluntary carbon markets can play in the UK Net Zero pathway, in tandem with other measures.
3. Supporting information, charts and data
Voluntary Carbon Markets and Offsetting – Charts and data (XLSX • 305KB)
https://www.theccc.org.uk/wp-content/uploads/2022/10/Voluntary-Carbon-Markets-and-Offsetting-Charts-and-data.xlsx
European airlines misleading customers with claims of “carbon-neutral” flights – study
October 10, 2022 (Carbon Market Watch)
By Gemma Bowcock
A new study commissioned by Carbon Market Watch has revealed gaping holes in the effectiveness of voluntary climate action taken by eight major European airlines. Misleading claims of “carbon neutral” flying, a dependence on poor quality carbon offsets and the low cost of a tonne of CO2 that customers can pay to offset are just a few of the problems highlighted in the report.
The voluntary action that major European airlines take to compensate for their pollution is far from adequate, a new report released today reveals. Research undertaken by Öko Institute on behalf of Carbon Market Watch found that the climate action taken by the eight biggest European airlines lacked transparency and integrity, with some airlines even making the false claim that customers can fly carbon neutral.
The Report:
Flights of Fancy; preventing European airlines from making far fetched climate claims.
“While not paying for their pollution, airlines are sending misleading climate neutrality signals to customers based on purchasing poor-quality carbon offsets. This bad practice must end,” said Daniele Rao, expert on decarbonisation of aviation and shipping at Carbon Market Watch.
For the European Union to meet its climate goals, more regulation is urgently needed in the aviation industry, climate policy experts from Carbon Market Watch recommend in a related briefing based on the findings of the study.
“By ensuring that airlines pay for their pollution and provide reliable evidence to back up their green claims, new policies could improve prospects for the climate and rein in the greenwashing that is rife across the aviation sector,” Rao says.
Flights of fancy
Taking a flight is one of the most carbon-intensive actions that a person can do but, since pandemic rules were lifted, airlines have been working hard to cloud this fact to encourage customers back into flying. The new study records that most of the carbon offsetting options offered by the airlines were from cheap and low-quality projects with uncertain benefits for the climate, and no guarantee of permanence.
Main findings of the report
Low visibility: There is a major lack of transparency by airlines when it comes to reporting their voluntary actions.
Economy class: Nearly all airlines rely on relatively cheap forestry projects in developing countries that are unsuitable for offsetting fossil fuel emissions due to the non-permanence of carbon storage.
Cheap deals: The estimated average price for purchasing a carbon credit per customer varies between airlines, with a range between €9 and €30. The price paid by two airlines at the corporate level, without customer input, is even lower at €4 and €8. All prices paid are way below the true cost of emissions reductions in the aviation sector.
Off the radar: Several airlines are still ignoring the effects of non-CO2 emissions, such as nitrogen oxides and water vapour, at higher altitudes, which cause a warming effect up to three times worse than carbon dioxide alone.
Faulty signalling: The airlines provide a misleading signal that carbon offsets significantly reduce or eliminate the climate impact of flying, which could incentivise further growth in air travel when we should, instead, be reducing it.
Table 1 – Summary of results from study, see full results and comments in the report. (See report for table)
Currently, the carbon emissions of flights within the European Economic Area (EEA) are paid for in the EU’s Emissions Trading System (EU ETS), while any flights that start or end outside of the EEA are covered by the International Civil Aviation Organisation’s (ICAO) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). CORSIA requires airlines to offset a small portion of their CO2 emissions, but has been shown to be ineffective in driving the decarbonisation needed in this polluting industry.
Regulation required
The report showed that additional voluntary action by airlines is similarly ineffective, and the need for governments to step in was highlighted in an associated policy paper. The paper, published by Carbon Market Watch, recommends:
- As the EU institutions embark on the so-called trilogue to find common ground for a final deal on the revision of the EU ETS for aviation, they should seize this opportunity to end the reliance on airlines’ voluntary actions to mitigate the negative impacts of their emissions, by expanding the EU ETS scope to cover all flights departing and arriving in the EEA, leaving fewer uncovered emissions.
- The EU should require clear and complete disclosure of information from airlines regarding their purchase of carbon credits, as well as any other voluntary actions they take. This can be achieved through the EU corporate sustainability reporting standards being developed by the European Financial Reporting Advisory Group (EFRAG).
- The EU should also ban misleading advertisements, such as carbon neutral flights, through its review of the Unfair Commercial Practices directive.
- Guidance on how to make informative, rather than misleading, claims should be provided by EU regulatory bodies, for example through the European Commission’s Green Claim initiative.
Contact details
Gemma Bowcock
Communications Officer
Carbon Market Watch
gemma.bowcock@carbonmarketwatch.org
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Carbon offsets allow some companies to hide poor performance on cutting own emissions, government advisers say
Offsets can mask insufficient efforts from firms to cut their own emissions, often deliver less than claimed, and can muscle out other environmental objectives in the rush to capture carbon, the Climate Change Committee warned.
By Hannah Thomas-Peter
Climate change and energy correspondent @hannahtpsky
Thursday 13 October 2022
Voluntary carbon markets are not working and risk delaying net zero carbon emissions targets.
That is the stark warning from the independent Climate Change Committee (CCC), which scrutinises government policy and progress toward decarbonisation.
In a new report the committee says “businesses are increasingly turning to voluntary carbon offsetting as they aim to reach Net Zero. But recent market growth is premature.
“Offsets can mask insufficient efforts from firms to cut their own emissions, they often deliver less than claimed, and they may push out other environmental objectives in the rush to capture carbon.”
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Carbon offsetting allows companies to compensate for their own pollution and boost climate credentials by purchasing credits from projects around the world that reduce or avoid greenhouse gas emissions, typically involving things like tree planting or nature restoration projects.
But the quality of these credits can vary hugely and there are no agreed global standards.
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Last month Sky News reported exclusively that nearly half of the carbon offsets held by energy company Centrica on behalf of its UK business and residential customers have such a poor reputation that the EU banned them from its own emissions trading system in 2013.
Centrica told Sky News: “These carbon offsets were initially brought to back a tariff which has not been sold since 2019.
“We subsequently made the decision not to use them again as they were not aligned with our high environmental standards.”
Experts said that the Centrica offsets issue was indicative of a much broader problem with voluntary carbon markets, which are essentially unregulated and growing at an extraordinary pace.
Some studies have projected that if demand keeps growing the global market could be worth up to $50bn by 2030.
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The CCC report says that current shortcomings “could be overcome with stronger governance to ensure high-integrity carbon credits and clearer guidance for businesses to encourage them to cut their own emissions first and foremost, before turning to offsets.”
Chief executive of the Climate Change Committee Chris Stark said: “Businesses want to do the right thing and it’s heartening to see so many firms aiming for early Net Zero dates.
“But poor-quality offsets are crowding out high-integrity ones. Businesses face confusion over the right approach to take.
“There is a clear need for government to make standards stronger and point businesses towards an approach that prioritises real emissions reduction ahead of offsetting.
“Those businesses that choose to support the economy-wide transition to Net Zero should get the credit they deserve.”
https://news.sky.com/story/carbon-offsets-allow-companies-to-hide-poor-performance-on-cutting-own-emissions-government-advisers-say-12718835
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