Carney Taskforce Looks to Boost Global Carbon Offset Market

A group set up by ex-Bank of England Governor Mark Carney seeks to bolster the scale and credibility of traded carbon offsets, even as critics warned the approach may not be the best way to tackle climate change.

The report by the Taskforce on Scaling Voluntary Carbon Markets released Wednesday laid out how a global market for trading carbon offsets, a tool that’s become increasingly popular with corporations seeking to zero out their greenhouse gas emissions. Buying such credits are often much cheaper than undertaking structural changes to lower emissions from a company’s operations.

The group recommended establishing criteria to verify carbon that was avoided or reduced by a project, increase the supply of high-quality credits and the creation of a futures market to help create a transparent market price.

The report stressed that emissions reductions by companies should be the priority, but that carbon offsets should also be used to speed up emissions reductions for parts of businesses that are currently difficult to decarbonize.

“This is complementary, it’s one piece of the puzzle, but we need this market,” Carney told a panel at the World Economic Forum on Wednesday. “A part of this is putting companies on the hook.”

However, there are concerns that the urgency to slash emissions over offsetting isn’t cutting through. The report should go further to enforce that hierarchy, according to Owen Hewlett, a member of the taskforce and chief technical officer at the Gold Standard, which established standards for environmental projects.

Otherwise it could lead to more companies relying on carbon offsets without taking steps to reduce emissions from their businesses.

“I don’t feel the report goes far enough in its calls to align properly with the Paris Agreement,” Hewlett said at a briefing.

Ahead of the report’s release, dozens of academics signed a letter calling into question whether scaling up carbon credits is even a good idea in the first place. They cited past examples of fraud and an overall ineffectiveness of some offset programs.

“We cannot assume that carbon markets will always generate biodiversity co-benefits,” said Katie Kedward, an economist and policy fellow at University College London’s Institute for Innovation and Public Policy and a signatory to the letter.

“Offsetting tools have a poor track record in terms of enhancing biodiversity and forest health, and they cannot be used as a replacement for more important steps to restore nature,” she said.

Bloomberg Philanthropies advised the taskforce on funding.

©2021 Bloomberg L.P.

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