When a prospective buyer approached a group that restores Myanmar’s endangered
mangroves about purchasing the credits used by companies to offset their carbon
emissions, they were told the tokens had sold out.
Spiking gas prices across Europe. Complaints from middle-class families from Madrid to the Midlands. Editorials are written about Europe's over-reliance on Russian gas, yet it flows unabated despite a slew of geopolitical concerns.
The potential size of carbon markets is enormous with McKinsey estimating carbon credits could be worth in excess of $50 billion by 2030 and continue to grow through to 2050 as countries and companies strive to achieve their net-zero goals.
It's possible to support climate projects for their own sake, without offsetting emissions. In everyday language, ‘buying carbon credits’ and ‘offsetting’ are used interchangeably. But they are not the same. To stop greenwashing while increasing funding for climate projects, there is an urgent need to separate the unit, a carbon credit, from the activity, making a climate claim.
While Singapore’s recent announcement that the carbon tax was increasing fivefold understandably gained attention, the acceptance of carbon credits as payment could prove a key next stage in the evolution of these still nascent markets and help drive international investment in the sector.
We were privileged to participate in person at the COP26 summit in Glasgow this month. It was most enjoyable to see and exchange with many colleagues and partners after this extended period of pandemic-induced virtual calls.
So here comes COP26, buffeted by Covid headwinds and soaring energy costs, not to mention rampant profiteering by the host city and the organisers, which Prime Minister Boris Johnson hopes will give him a green sheen to deflect some of the brown stuff being flung his way.
It hasn’t taken long for governments to notice the EU ETS, spitting out revenue at the rate of half a billion euros a week, and get the idea that here is a mechanism ready-made to be exploited at a time of crisis.