by DUBAI, United Arab Emirates (UAE) – A major effort is underway to raise money to save Planet Earth.
Climate finance experts say trillions of dollars are needed for forestry and renewable energy projects such as solar and wind in the developing world, all aimed at reducing pollution from burning oil, gas and coal, which is cause of climate change.
The price tag is very exciting: Investment in energy transition technologies was $1.3 trillion last year, according to the International Renewable Energy Agency, an intergovernmental group, and that needs to increase at least fourfold to limit global warming. to avoid say scientists. disastrous.
Even rich governments can’t promise that kind of money, and it’s often a struggle to get respective congresses and parliaments to sign off on even modest sums.
Enter a plan to combine the money-killing power of the private sector with carbon credits, a big topic of discussion at the annual climate talks in Dubai.
“There is a large amount of capital to be raised in a short period of time, so governments will have to be creative in how they get there,” said Yousef Alhorr, founding chairman of the World Carbon Council, an international and sustainable carbon credit. a development program based in oil-rich Qatar.
Carbon markets already exist and have a lot of baggage attached to them, so there is plenty of talk in the plan. Critics of the plan being developed say existing voluntary programs have been poorly overseen – leading to fraud and abuse of rights.
Proponents, such as US Climate Envoy John Kerry, lenders such as the World Bank, and the UN acknowledge that the markets have room for improvement. They say their monitoring plan would improve and provide more money.
Such voluntary carbon offset schemes would be similar to those long offered by airlines to travelers, who willingly pay an additional fee to compensate for the carbon generated by their flights, often to fund tree planting projects or to protect existing forests.
The markets would work like this: Participating countries could generate carbon credits based on projects aimed at achieving their own climate goals, such as protecting existing forests from development or closing coal-fired plants.
Private sector players could then buy the credits, which would allow them to emit a certain amount of carbon dioxide or other greenhouse gases. Heavy polluting companies would be important customers.
Each credit would be equivalent to a ton of CO2 or other equivalent greenhouse gases that can be reduced in the air, sequestered or avoided by using green energy instead.
Money from the credits generated would go to local projects. The price of carbon per ton in the market would change, which would mean that the higher it rose, the more green projects could get through new credits generated.
In Dubai, the US government along with the Bezos Earth Fund and the Rockefeller Foundation announced a project called the “Energy Transition Accelerator.” It aims to guide the plan through the use of “high-integrity” carbon accreditation to achieve potential checks and support local communities and communities.
Until now, carbon markets have largely been the responsibility of independent registries. The ETA scheme would give governments a greater role in ensuring safeguards are put in place.
Chile, the Dominican Republic and Nigeria are pilot countries for ETA, which aims to be established by Earth Day in April. Proponents estimate that between $72 billion and $207 billion could be mobilized for transitions to clean power projects by 2035.
It is a voluntary program, and companies such as Bank of America, Mastercard, Morgan Stanley, and PepsiCo have signed a letter of interest to participate.
In the past, companies participating in other carbon markets have made false claims about projects, known as greenwashing, and some financiers, farmers and others are often counting one project – meaning the benefits are overestimated . Some corporate cheaters have cranked up emissions only to reduce them later and claim credits for going greener.
Critics say that carbon credit programs are allowing polluters to keep polluting and have siphoned attention from the most important goal – ending the use of fossil fuels, which is the No. 1 cause. 1 with global warming.
“It will always be green to buy offsets from carbon markets without phasing out fossil fuels,” said Erika Lennon, senior climate & energy attorney at the Center for International Environmental Law.
Kerry admitted that carbon credit systems had been “abused by some people” and that they had “wronged everyone.
“We believe it’s more remedial in the approaches we’ve put together,” he said during a December 4 panel event at COP28, where he detailed the Energy Transition Accelerator.
Simon Steill, executive director of the UN Framework Convention on Climate Change, warned against over-reliance on such programmes. He said they “cannot represent government action” and should be accompanied by “strong reductions in internal emissions from the private sector”.
He called for new projects in agriculture, power storage, retirement of fossil fuel assets, green hydrogen produced through renewable sources, and electric mobility.
However, it is hard to imagine governments footing the bill for an energy transition on a massive scale.
Ajay Banja, president of the World Bank, said there is a need to unify a fragmented market to create greater scale. The Washington-based multilateral bank has devised its own carbon credit program, the Forest Carbon Partnership Facility.
In this report, several countries including Guatemala, Vietnam and Congo plan to issue the first 24 million credits for next year, and 11 other countries are in the market to join. The bank says the project hopes to receive up to $2.5 billion by 2028.
“Ultimately, these credits have the potential to transfer billions of dollars to communities from companies and governments, voluntarily,” Banja said during the panel.
“This is difficult, and we will be criticized: I am quite sure of that. We will make mistakes: I am quite sure of that,” he said. “But we will learn from them.”
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AP journalists Seth Borenstein and Sibi Arasu contributed to this report.
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