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Carbon credits and claims

Carbon markets, as their name suggests, trade in carbon dioxide and other greenhouse gases, with the intended purpose of benefiting the climate by channelling finance to climate projects that help reduce emissions. The units that are traded are collectively known as carbon credits, though they may go by other names in specific markets. Each of these credits typically represent a single tonne of carbon dioxide or its equivalent in other greenhouse gases (CO2e).

Some markets are regulated, such as those being established under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC). Others are unregulated, such as the voluntary carbon market, where companies and individuals buy carbon credits issued by various standards bodies.

On the supply side, climate projects issue carbon credits based on their estimated climate impact which are then sold, usually via intermediaries, on the carbon market. These projects include forestry projects, carbon capture and storage, wetland management, regenerative agriculture, renewable energy projects in countries that cannot afford them, and more.

On the demand side, buyers purchase carbon credits to use them for numerous purposes. Unfortunately, the most common use remains (supposedly) to compensate for or offset emissions. Offsetting is a highly problematic practice because it diverts the focus away from the real emissions reductions that must be urgently achieved, provides ample opportunity for greenwashing and usually does not represent the claimed climate impact.

We oppose the use of carbon credits to compensate for emissions. This means that sellers must not market their carbon credits as an offsetting tool. Purchasers of carbon credits must not use them to make dubious claims, such as ‘carbon neutral’ or ‘climate neutral’. Instead, buyers should clearly and transparently emphasise only that they contributed to climate action by providing a certain amount of funding to a certain type of project. This is known as the ‘contribution claim’ model. 

What is CMW doing about it?

In the international arena, Carbon Market Watch focuses on:

  • The development of regulated carbon markets under Article 6 of the Paris Agreement, namely at the UNFCCC’s annual Conference of Parties (COP) 
  • The supply and demand sides of the unregulated voluntary carbon markets
  • Corporate climate action and greenwashing

“Global carbon markets need to be designed and implemented in such a way that they achieve real and tangible climate goals while serving society and benefiting local communities. They must also be subsidiary and complementary to efforts to slash emissions.”

Gilles Dufrasne

Lead expert on global carbon markets

“Global carbon markets need to be designed and implemented in such a way that they achieve real and tangible climate goals while serving society and benefiting local communities. They must also be subsidiary and complementary to efforts to slash emissions.”

Gilles Dufrasne

Lead expert on global carbon markets

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Carbon markets must achieve real and tangible climate goals while serving society

Contact our experts

Gilles Dufrasne
Lead on Global Carbon Markets

gilles.dufrasne[at]carbonmarketwatch.org

Jonathan Crook
Expert on Global Carbon Markets

jonathan.crook[at]carbonmarketwatch.org

Lindsay Otis Nilles
Expert on Global Carbon Markets

lindsay.otis[at]carbonmarketwatch.org

Benja Faecks
Expert on Global Carbon Markets

benja.faecks[at]carbonmarketwatch.org

Inigo Wyburd
Expert on Global Carbon Markets

inigo.wyburd[at]carbonmarketwatch.org

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