By Chris Lang
During the virtual World Economic Forum meeting this year, Mark Carney launched the Final Report of the Taskforce on Scaling Voluntary Carbon Markets. John Sauven, CEO of Greenpeace UK, and Craig Bennett, CEO of the Wildlife Trusts, wrote to Carney to express their “serious reservations about the Taskforce”.
Sauven told the Guardian that,
“This initiative risks setting a terrible example ahead of the critical carbon market negotiations at the global climate summit in Glasgow later this year. [It] seems to have ignored past failures of offsetting schemes to guarantee emission cuts. At the same time, it assumes that the natural world has unlimited potential to absorb climate-wrecking emissions. It fails to acknowledge that the most important thing companies must do is to reduce their own emissions and use of fossil fuels.
“For as long as these critical issues remain unaddressed, Carney’s scheme will serve as a giant get-out-of-jail-free card for polluting companies. It will undermine tighter controls in international agreements while doing little to actually tackle the climate emergency.”
Time to scrap carbon markets
Greenpeace and the Wildlife Trusts are correct to point out what’s wrong with Carney’s Taskforce. But the letter gives the impression that carbon offsets and carbon markets can somehow be “improved”, for example through a “high standards approach” or “effective models of governance”.
Carbon offsetting and carbon markets have nothing to do with reducing emissions. The purpose of carbon markets is to allow the fossil fuel economy to continue for as long as possible. Which is why Big Oil, Big Finance, and Big Airlines are all part of Carney’s Taskforce.
The problem is not so much the content of the Taskforce’s final report, but the fact that after two decades, carbon markets have utterly failed to reduce greenhouse gas emissions. Carbon markets remain a dangerous distraction from the need to leave fossil fuels in the ground.
Here is Sauven and Bennett’s letter to Carney:
Institute of International Finance
European Representative Office
Square de Meeûs 23
Mark Carney, COP26 Private Finance Office
Bill Winters, Taskforce Chair and Group Chief Executive, Standard Chartered
Tim Adams, IIF President and CEO
26 January, 2021
We hope this letter finds you well.
We are writing to express our serious reservations about the Taskforce on Scaling Voluntary Carbon Markets. Our concerns cover its shortcomings both in principle and in practice, which could jeopardize genuine climate change mitigation and with it the achievement of the Paris targets.
We must prioritise rapid and deep reductions in fossil fuel emissions to reliably and meaningfully tackle climate change. We feel that the Taskforce’s blueprint does not prioritise this and instead provides an easy way, at scale, for companies to offset, rather than reduce, their emissions by disproportionately relying on Carbon Dioxide Removal (CDR).
All IPCC pathways that limit global warming to 1.5°C by 2100 require the global economy to become net negative CO2e emissions during the latter half of this century. Protecting and restoring our natural ecosystems are a vital part of the solution to tackle climate change, but they cannot solve it alone and their carbon sink potential is finite. Fundamentally we need to immediately reduce emissions from fossil fuels and land use. Scaling voluntary carbon markets now negates this, and also severely risks limiting market supply for when biological CDR will be critical to achieving the necessary net negative emissions.
There are also substantial issues with the envisaged provision of carbon credits and the governance of the market. Our collective experience says that strong commitments, even by progressive corporates, have often failed to materialise on the ground. And even in sectors which should theoretically be simple to deal with, such as sourcing of timber and agricultural commodities, high-standards certification has proved extremely challenging.
Further, there has been a very poor record of land-based offsets over decades seeking to address these issues. They are not trivial or straightforward to tackle – serious and committed people have tried to resolve them, largely without success, for many years. That large companies and financiers have now entered into this field will not automatically resolve those deep-rooted challenges. They could exacerbate them.
We understand that the Taskforce blueprint may set the stage for the carbon market settlement in the upcoming COP26 negotiations. It is imperative and urgent therefore to address its flaws. If not, then there is a danger that it becomes a large international greenwashing exercise, creating a market with low standards but high PR value. For example, there remain loopholes in states’ agriculture, forests and land use emissions accounting and methodology, which could lead to double counting – and extensive voluntary markets compound these issues. Even if a high standards approach is endorsed by UN states, interaction between compliance markets and low standards voluntary markets would expose the former to the problems with the latter. It risks causing active harm to the integrity of compliance carbon markets.
We are not reassured by the Taskforce’s consultation document published in November last year. To achieve genuine and effective delivery for climate and nature, we recommend significant focus and improvements in the following areas of the Taskforce blueprint:
Transparent publication of responses to the Taskforce consultation. Recognise the lack of equivalence of fossil and biological carbon. At the very least, embed the requirement for companies to separately account and report emissions between the two. Due to this lack of equivalence, direct emissions reductions should be the priority pathway to deliver companies’ climate strategies (net zero or net negative) of both investors and buyers. This should form part of the verification standards. Historic/Vintage credits should not be permitted as they no longer represent any additional benefit to the climate. The cut-off/baseline year for offsets is crucial and no offsets generated prior to 2020 should be permitted in future schemes. Clear and evidenced explanation of how the approach taken in private voluntary markets will not impact on the integrity and operation of compliance markets, including the outcome of future negotiations later this year on Article 6 of the Paris Agreement. Pinning down genuine additionality of emissions reductions of projects (including via the inclusion of avoided emissions from renewables and avoided deforestation, which has a track record of being notoriously hard to verify). Effective models of governance for voluntary markets, which is currently lacking. This will include embedding transparency, standard setting, independent verification of emissions reductions from projects, and ensuring projects boost biodiversity and carbon capture, while respecting community and land rights; and Universal genuine and credible alignment with Paris Agreement targets of corporate plans of participants, which is currently lacking. This should include strict requirements on companies or investors to ensure that they have robust climate plans in place, with clear and transparent evidence that the plans are well on the way to being implemented, to directly reduce the majority of their own emissions (via energy efficiency, changing fuels, or reducing activity levels), as a condition for participating in the carbon market in the first place.
We would welcome the opportunity to meet with you to discuss this.
CEO, Greenpeace UK
CEO, Wildlife Trusts
Cc Dylan Riddle, IIF
Matt Toombs, Cabinet Office
Peter Hill, Cabinet Office
Kate Hughes, BEIS