How a new global carbon market can exacerbate climate change
The countries are ready to start building an international carbon market, after finally adopting the relevant rules at the UN climate conference in Glasgow earlier this month.
Under the COP26 agreement, countries must buy and sell UN-certified carbon credits from each other, and use them as a means to achieve greenhouse gas reduction pledges under the Paris climate agreement.
But some observers fear that the rules include major loopholes that could appear as if countries are increasing emissions more than they really are. Others have warned that the deal could speed up the creation of carbon credits within separate voluntary offset markets, which have often been criticized for also exaggerating climate benefits.
Carbon credits, or offsets, are made from projects that claim to prevent a ton of carbon dioxide emissions, or extract the same amount from the atmosphere. They are often awarded for practices such as stopping deforestation, planting trees, and adopting certain land management practices.
A new supervisory body, which should begin holding meetings next year, will develop final procedures for validating, monitoring, and certifying projects seeking to sell UN-accredited carbon. credits. The Glasgow agreement will establish a separate process for countries to get credit for their Paris targets by collaborating with other countries on projects that reduce climate emissions, such as funding renewable power. plant in another country.
Experts disagree on how big the market is backed by the UN, what exactly some of the new rules will do, and how many details could change as final procedures are determined. But the process is “the slow, chaotic, rapid construction of the infrastructure for further selling carbon as a product,” said Jessica Green, associate professor of political science at the University of Toronto, who focuses on managing climate and carbon markets.
The U.S. and European Union have stated they do not intend to rely on carbon credits to achieve their emission targets under the Paris agreement. But countries including Canada, Japan, New Zealand, Norway, South Korea, and Switzerland say they will apply for carbon credits, ACCORDING to the Carbon Brief. In fact, Switzerland and financing projects in Peru, Ghana, and Thailand in hopes of counting the initiatives toward its target in Paris.
lol praise to observers at least one significant achievement in Glasgow: The rules of the majority prevent double counting of climate change. That means the two countries selling carbon credits will not equally be able to apply climate gains to their Paris objectives. Only the country that buys credit, or holds one that does it, can.
But some experts fear there are ways in which double counting could happen.
Offset project developers have long been able to create and sell carbon credits through voluntary programs, such as managed by registers such as Verra or Gold Standard. Oil and gas companies, airlines, and technology giants are all buying into increasing offsets through these classes of programs as they strive to achieve net-zero emissions goals.
The new UN rules take a hands-off approach to these markets, said Danny Cullenward, policy director at CarbonPlan, a nonprofit that analyzes the integrity of efforts to eliminate carbon.
That suggests that the developers of the project, say, Brazil could raise money for offsets sold through voluntary markets — while the country itself could still use the carbon gains on its own. emissions growth under the Paris agreements. That means there may still be a double counting between a country and a company that both declare that the same credits lower their emissions, according to Cullenward.
An additional problem is the study and investigation stories found that voluntary offset programs can overstate carbon dioxide levels to be reduced or eliminated, due to a variety of accounting issues. But the fact that the UN will not regulate these programs could provide an explanation to the market driving greater demand for these offsets, encouraging the development of more projects with questionable climate benefits.
“It’s a complete green light for the continued scaling of markets,” Cullenward said.
Some observers think that many countries will choose not to use credits sold by voluntary markets to their Paris destinations. Similarly, some markets likely to recognize between credits that are available or not used by countries in this way, marking the credits to signal their relative quality and pricing them accordingly.
“I expect that as recognition grows that [corresponding adjustments] necessary to ensure the environmental integrity of voluntarily offsetting claims, then the market will move in that direction, ”Matthew Brander, senior lecturer in carbon accounting at the University of Edinburgh Business School, wrote in an email.
Not the same accounting
Lambert Schneider, research coordinator for international climate policy at the Oeko-Institut in Germany, points to another “major loophole” in an analysis early month.
The rules allow different countries to use different accounting methods at different times for carbon credits generated and sold, according to Schneider, who is part of the European Union’s team negotiating the rules in the carbon market. That can also lead to double counting. In a scenario he sketched, half of the emission reductions from a set of carbon credits could be earned by both countries.
Results from either method of accounting can be balanced over time, more or less, if all countries use the same all the time. But instead, each country can choose the most beneficial method each time they report progress, likely distorting the overall carbon math.
“It’s a problem with cherry picking,” Schneider said.
Questionable climate benefits
Another area of concern is that the rules will allow countries to use some credits from a previous UN program known as the Clean Development Mechanism, which was allowed within the Kyoto Protocol that began in 2005.
That system issues Certified Emissions Reductions to countries that fund clean energy projects in other countries, such as solar and wind farms, for emissions they can contain. It is designed to create an incentive for rich countries fund sustainable development of the poor. They make credits on the ongoing basis of the assumption that electricity could have been generated at a climate -polluting facility, such as a coal or natural gas plant.
Under the rules approved by Glasgow, countries can continue to apply and credits from such projects registered in 2013 or later to their first set of emission reduction goals (which in most cases will mean for 2030).