What future for offset credits and carbon markets?
We are concerned to see that the L.6 text leaves open the option of continuing to generate and trade offset credits. If we are going to keep global average temperature increases below 1.5ºC, we need to be achieving the decarbonisation transformation.
Written by Katherine Watts, International Climate Policy Advisor at Carbon Market Watch
Use of offsets effectively reduces the ambition of the cap that they are bought to achieve, and is like ‘shuffling deckchairs on the Titanic’. This might be less of a problem in a world where there are no longer any icebergs, but that’s what we’re in Paris to avoid. The INDCs are already placing us on track for a 3C world (icebergs unlikely), and weakening their already woeful ambition would be making even more severe this collective carbon crime against life on earth.
If markets are to be used for compliance in the new agreement, ensuring environmental integrity and contributions to sustainable development are imperative. Trading should be under ambitious caps, expressed as multi-year national carbon budgets and the credits should be real, permanent, supplemental and verified and ensure there is no double counting. Shares of proceeds would help to create needed new and additional climate finance.
The CDM created structures that could be used to transform it from an offset mechanism, to one that acts as a channel for climate finance. This would give wealthier countries an MRV-able channel to contribute towards their climate finance obligations and help those countries in need of support to achieve mitigation outcomes. This would also help to reduce some of the risks of double counting. The private sector could still contribute in a spirit of corporate-social responsibility, but again, as climate finance.
We need real emissions reductions brought about through transformative change. There is just not enough room in the remaining global carbon budget to shuffle offset credits around.
18 Sep 2017