‘Houston we have a problem’ : ???????????? ??????????????
I keep calling for stringent? REGULATION of the ?voluntary carbon markets (VCM), but I must admit that regulators can mess up a big way, too. The latest eye opening lesson comes from Canada’s Alberta province where 壳牌 and the provincial government colluded to create ‘regulated emissions removal units’ that are inflated by 100% (i.e. what is in reality a tonne of removal appears to be ?two tonnes on ?paper…) as just reported by the markets-hating Financial Times . [ addition: ?Shell's David Hone shared his wise thoughts on this story, don't miss it!]
So it is timely that in addition to my recent ?pro-regulation arguments on ‘Tattoos, the Highway Code, Whales & VCM ’ I try to shed light on ?????? ???? ???????? ?????????????? ???????????????? ???????? ???????????? ?????????????????? ?????? ?????????????? ???????????? , such as carboncredits. There are at least three key reasons:
1, ???? ??????????????????/intangible ??????????????/asset: emissions reductions, but even carbon capture and storage (CCS) as in the Shell case, are inherently complex and complicated, hence open to manipulation/gaming especially if CO2 benefit quantification ?is based on counterfactual argumentation, such as with CO2 reduction activities. Quantification is more of an art than science as ?we used to say at the Worlds’ first large scale, 100 million EUR, carboncredits purchase programme of the Dutch Government (more on this below).
2. ??? ????????????, ???????????? ???????????????? ?????????????? ?????? ?????????? ?????? ???????????? ???? ?????????????? ?????? ???????????????? & ???????????? of the underlying climate actions. Note, that this is very unusual in normal market situations: normally buyer and seller has no interest to ‘talk up the value’? of a product as then the buyer will pay more than originally warranted. Such perverse value/volume talking-up incentive exists in the project-based carbon markets, requiring attention.
3. ??????? ????????-?????????????? ?????? ?????????????? ?????? ???????? ?????? ?????? ?????? ???????? ???? ???? ??????????????????: the voluntary carbon market has been built on this questionable principle and Alberta shows that the regulated incumbents have substantial power influencing state level regulators s well (note that such ?lobbying happens all the time & elsewhere: the EU’s renewable regulations has copy-pasted text from Drax Group , the owner of the world largest biomass burning plant).
I think that these three features explain why the constant carboncredits troubles are not a bug, but a feature.
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Let me also highlight a crucial aspect: on how compliance markets (ETS - emissions trading) and regulations ( carbon tax, standards , best available technology obligations etc) actually define what voluntary markets can and cannot do as they provide the landscape in which the "above and beyond regulatory requirements " activities of the voluntary markets would occur.This in turn makes the VCM inherently exposed to the policy-makers and regulators adding a 4th feature leading to constant 'trouble' (i.e. regulators keep reshaping the VCM even if this is not their goal).
This Shell case coincides with the ‘Big Brands’ Green Claims Uncovered ’ BBC Panorama documentary that created some shock-waves within the voluntary carbon market. Rather regrettably the documentary included some secretly recorded parts with subsequent editing “which cherry-picked a conversation out of context and totally twisted it's portrayal”; see Ecologi | B Corp? ’s Elliot Coad ’s viral post for the painful details . We definitely need honest discussions and corresponding rules ensuring integrity and ?transparency of whatever climate governance and tools we chose to use. This BBC’s VCM reporting blunder was a shock; then out of curiosity I? looked at the curated project list of Ecologi and to my great surprise I found a project - OUARZAZATE II CONCENTRATED SOLAR POWER PROJECT ( see: Verra registry and AfDB )- ?in their portfolio that is highly likely to be built on a blatant double-dipping, retroactive ‘climate action branding’ and actual twisting of methodological requirements (i.e. the technology being on a positive list) to generate carboncredits on an activity that had happened already, irrespective of the contribution from carboncredits. Just imagine: you have solar panels on your roof and someone knocks on the door telling you that you can get some extra money by selling a carboncredit to them that they will resell at a profit as ‘a contribution to solving the climate crisis’ ?to an unsuspecting or greenwashing entity. See also my post on Universal Carbon Registry – XTCC – ZERO13 trying to run such double-dipping on existing, operational projects on an astonishing scale.
After more than three decades of carboncredits in circulation we still have recurring problems – let’s solve them through (1) regulating the assets ( carboncredits) and (2) corresponding claims/#greenwashing in a manner that (3) speeds and scales up action. ?Disclaimer: I had created carboncredit projects for and then worked as a civil servant for carboncredits.nl , the Dutch Governments’ 100 million EUR pioneering and seminal carbon credits – UNFCCC compliance Kyoto Mechanism's Joint Implementation - programme that actually created & popularised the term #carboncredit, hence I am pretty emotional about the carboncredits / VCM and regulated-carbon market mess that we have maneuvered ourselves into with decades of work!
#VCM #carbonmarkets #carbonpricing #netzero #climatecrisis #sustainability #voluntarycarbonmarkets
Sustainability needs peace ??
6 个月Ouarzazate... what a great place. But I get your points. Esp. point 2 sounds pretty horrendous. The same will likely happen with biodiversity credits. Probably worse, because it is so much more complicated.
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6 个月I have come to the conclusion that there is no place for voluntary carbon markets in the transition to zero emissions, for a number of reasons 1) the credits are based on improvements to natural “sinks”, protecting ecosystems (ie avoided emissions) and on switching to renewable energy. Those credits are then used to permit, aka “offset” an equivalent quantity of emissions by an organisation. The fact is we need BOTH natural systems restoration / avoided emissions AND organisations reducing their emissions to zero - we can’t monetise the former to allow the latter. 2) credits as Zsolt Lengyel points out in his article are complex intangible “paper based” products - with a high level of intermediation and most of the money retained in the Global North. The intermediation adds cost and introduces opportunities to game the system. In this world it isn’t the most important projects that are implemented but those which are easiest and offer the greatest profit. All this means that VCMs are highly inefficient at best, fraudulent at worst. 3) to ensure that we achieve organisational decarbonisation AND ecosystem restoration etc we should fund the latter through multilateral institutions paid for by polluting companies and countries..