By Chris Lang
The International Finance Corporation has launched the Carbon Opportunities Fund, “a global investment platform that will raise private capital for an innovative model to source, tokenize and sell high-quality, verified carbon credits”.
IFC does not say where it’s going to source its carbon credits, stating instead that they will be generated by “nature-based projects certified by leading international standards bodies”.
Verra, the largest standards body for carbon credits, announced in May 2022 that it would not allow the tokenisation of carbon credits from its registry. On 3 August 2022, Verra started a 60-day consultation on cryptocarbon.
In a statement, Paulo de Bolle, Senior Global Director, Financial Institutions Group, at the IFC says,
“This new partnership will foster the standardization of carbon credits generated in emerging markets and help mitigate climate change. Nature-based solutions can deliver up to 40% of the carbon removal required to combat the climate crisis. This new framework that will use new blockchain technologies is an innovative way for capital markets to fully engage in carbon credit trading in a transparent, secure, fair, and beneficial manner.”
Bolle’s figure of 40% for the amount of carbon removal that can be achieved by nature-based solutions comes from a 2017 paper titled “Natural Climate Solutions”. Actually the figure in that paper is 37%, not 40%, and it is based on an extraordinary series of assumptions. Such as covering an area the size of Australia with trees, for example.
Then there’s the problem that these are offsets that will allow Big Polluters to continue burning fossil fuels, thus exacerbating the climate crisis.
Before COP26, a group of NGOs wrote an Open Letter warning of the dangers of nature-based solutions. “Carbon dioxide removals do not offset fossil fuel emissions,” they wrote.
Carbon Opportunities Fund: IFC’s partners
Here’s how the International Finance Corporation describes itself on its website:
IFC — a sister organization of the World Bank and member of the World Bank Group — is the largest global development institution focused exclusively on the private sector in developing countries.
In this case, the IFC is partnering with three US-based firms: Aspiration Partners, Inc; Cultivo Land PBC; and Chia Network Inc. All three companies are registered in the tax haven of Delaware.
Aspiration Partners, Inc was registered in Delaware on 18 July 2013. Aspiration is a digital bank that issues cards with the option to plant a tree with every purchase, and to buy carbon credits to offset emissions from buying petrol. The company claims on its website that buying offsets will “Automatically neutralize the climate impact of every mile you drive.”
As the Dutch advertising watchdog ruled last year when Shell made similar claims, Shell could not prove that it is fully offsetting the greenhouse gas emissions from driving. The watchdog ruled that there is “no actual equivalence between CO2 pollution from fossil fuels and the activities that are advertised as so-called compensation for this CO2 pollution: those activities cannot actually compensate for the pollution”.
Cultivo Land PBC was registered in Delaware on 2 December 2019. “Natural capital,” according to Cultivo, “is an emerging asset class that values the natural world, an economic approach that makes it clear why a tree is worth more alive than dead.”
Mark Tercek, the ex-head of The Nature Conservancy and former Goldman Sachs banker, is a director.
The company has a portfolio of forest, wetland, grassland, and regenerative agriculture projects. But the actual projects are not available on the company’s website without logging in.
Chia Network Inc was registered in Delaware on 1 August 2017. The company states that it is “building a better blockchain for real-world use”.
During COP26 in Glasgow, Chia Network announced a partnership with the World Bank’s Climate Warehouse.
The IFC and the World Bank are supporting the false solution of carbon trading. They are enabling Big Polluters to claim to be addressing the climate crisis while continuing to burn fossil fuels. It’s a dangerous distraction from the need to leave fossil fuels in the ground.
Unfortunately, the World Bank and now the IFC suffer from a misalignment of incentives that has lead them into “carbon markets” by the World Bank and now this by the IFC. Given the World Bank’s on-going search to remain relevant, the need for new “lines of business” has resulted in their ignoring the innumerable analyses and investigations exposing the inherent flaws of carbon markets and particularly those involving carbon offsets. Keep it simple advice is in order. Follow the EU and Canada into a transparent administratively viable policy with limited opportunity for corruption: a steadily rising carbon fee (Canada), rebate revenues to all households (Canada) and establish a Border Carbon Adjustment (EU CBAM) among willing countries. No carbon markets needed. No carbon offsets allowed.
While romantic idea, wouldnt be easier just to stop killing nature by greed?
What helps nature if you keep destroying Earth, then pay someone to plant trees, or create some CO2 tech.
You know carbon is fundamental for all life on Earth, and you wanna erase it from Earth. This whole carbon comedy is like petting a wild tiger, while hoping it won’t eat you.