The 26th United Nations’ Climate Change Conference of the Parties , scheduled to be held in Glasgow between October 31 and November 12 saw participating countries renew their Paris Agreement pledge to become carbon neutral by 2050.
One popular and controversial measure adopted by companies and countries to bring down the carbon levels in the atmosphere is the carbon offset method.
The compensation is done by activities like planting trees and restoring peatlands that help in reducing atmospheric carbon.
Investments will finance biogas plants, solar panels and geothermic energy, as well as programs aimed at increasing energy efficiency in buildings and electrifying public transport.
According to Ecosystem Marketplace, a data provider, the carbon-offset market is pegged at $1 billion for 2021.
Under the CDM, richer countries could reduce their emissions by paying for the development of carbon-lowering projects in poorer nations and count these reductions as part of their own targets.
The Kyoto Protocol adopted the cap and trade scheme where a cap was put on the emissions allowed on energy-intensive companies such as shipping and energy.
Many conservation societies have participated in offsetting themes with corporates where no actual benefits have been seen or the existing nature reserve or conservatory was already doing the work of carbon sequestering.
There are situations when forest conservation can use carbon credits fairly, such as when the funds are used to improve forest management, resulting in greater carbon sequestration.
“Since 1998, timber harvesting has been The Nature Conservancy’s primary source of funds for taxes and stewardship of the Upper St John River Forest.
Microsoft has developed its due diligence process and is looking for proposals for carbon removal projects it could fund.
Nestle is another country that is collecting credits by funding environmental projects done by growers and suppliers of its various raw materials in its supply chain.
“Carbon credits cannot be the strategy to mitigate the temperature rise on the planet.
There is some disagreement over allowing some countries to carry surplus credits from the old CDM system into a new carbon market, and double counting.
Unless the loopholes are straightened out and the rules become much more stringent, there isn’t much point in having a global carbon market flooded with cheap, ineffective offsets, says Haya.