Oil and gas companies have teamed up with the International Emissions Trading Association (IETA) on a new effort to build a global market for carbon credits generated from projects to conserve forests, soil and wetlands, they said on Thursday.
At the launch of the “Markets for Natural Climate Solutions” initiative at U.N. climate talks in Madrid, IETA said only 3 per cent of total climate finance was going to support such projects.
But storing more planet-warming carbon in ecosystems such as soils and trees could deliver about 30 per cent of the emissions reductions needed to meet the Paris Agreement goal to limit global warming to “well below” 2 degrees Celsius, it added.
“There is a massive discrepancy between what we are spending on this solution and what is on offer,” said Simon Henry, IETA’s director of carbon market development.
But corporations were beginning to grasp the possibilities, with major names such as Shell, Microsoft and Apple pledging hundreds of millions of dollars in the last 18 months to projects such as tree planting, he said.
The founding members of the new IETA initiative include energy corporations BP, Chevron, Shell and Woodside Energy, as well as mining and metals giant BHP and the U.S.-based Arbor Day Foundation, which has planted more than 300 million trees worldwide.
There is a massive discrepancy between what we are spending on this solution and what is on offer.
Simon Henry, director of carbon market development, International Emissions Trading Association
“When it comes to taking action in the climate space, the world has been very long on say and very short on do,” said Duncan van Bergen, vice president for nature-based solutions with Shell New Energies.
“We believe that nature has a role to play - not instead of, but in addition to, a lot of hard work that needs to happen to decarbonise energy, transportation, agriculture and other sectors of the economy,” he added.
As he spoke at the IETA event, about two dozen environmental campaigners and indigenous community representatives stood up, put their hands over their ears and walked out of the room in protest at the promotion of nature-based carbon markets and the involvement of fossil fuel companies.
On Thursday, they issued an open letter signed by 160 green and indigenous rights groups, including Friends of the Earth International and the Indigenous Environmental Network, calling for carbon markets to be kept out of the formal guidelines for implementing the Paris Agreement from 2020.
Carbon markets allow governments, companies and other entities to earn and sell or trade credits for tonnes of avoided, reduced or stored climate-changing emissions.
But critics charge that granting credits to “carbon offset” projects such as forest protection can allow big polluters to buy those, instead of substantially cutting their own emissions by using less fossil fuel and other measures.
Governments at the two-week talks in the Spanish capital are haggling over the rules that will govern how carbon markets should operate to make the world carbon-neutral by mid-century and meet the temperature goals of the Paris Agreement.
The campaigners’ letter said giving carbon markets the green light in Madrid “would lock us into even more emissions, further temperature rise, continued fossil fuel use and decades of inaction, distraction and corporate power-grabbing”.
Under the world’s existing carbon trading schemes, the largest of which covers the European Union, “global emissions have continued to rise”, they noted.
Last month, the World Meteorological Organization said greenhouse gases in the atmosphere hit a new record in 2018, exceeding the average yearly increase of the last decade and reinforcing increasingly damaging weather patterns.
Dipti Bhatnagar, who works on climate justice issues for Friends of the Earth International, said that in Mozambique - where she lives - multinationals Shell and Eni were starting a large natural gas project while showing interest in offsetting emissions from their operations by planting trees in Africa.
“This is completely problematic. … We are saying this is not the way to do things,” she told the Thomson Reuters Foundation.
Carbon market experts said discussions on “Article 6”, the part of the Paris Agreement that covers carbon markets, had failed to make much progress in the first few days in Madrid.
Countries are at odds over how the emissions reductions projects generate should be accounted for, with some pushing for a system that prohibits “double counting” with both the country that is home to the projects and the country that buys the credits counting them towards their national targets.
Another point of contention is whether billions of carbon offsets created as part of the “Clean Development Mechanism” under the Kyoto Protocol, the treaty that preceded the Paris Agreement, can be carried over into the new system.
China, India and Brazil, which own many of these credits, want to be able to sell them to help meet their Paris targets, but other countries say they should be cancelled or efforts to quickly reduce emissions will fail.
Sam Van den plas, policy director with Carbon Market Watch, an international advocacy group, said carrying those credits over would be the equivalent of allowing 700 coal power plants to operate continuously for 10 years.
“This risks undermining the Paris Agreement from the inside,” he told journalists. “Cheating the climate system does not get us anywhere.”
At a protest inside the conference, activists and leaders of U.S. indigenous communities chanted “Article Six, you cannot fix” and tore up a piece of paper representing it.
Simon Lewis, a professor who researches tropical forests at University College London, said even successful markets for carbon offsets derived from tree planting and other natural systems could not substitute for switching away from fossil fuels, if emissions were to be cut to net-zero.
“This nature-based solutions is becoming a smokescreen for just continuing business as usual,” he added, saying oil and gas companies needed to change their business models.
Arthur Lee, a senior technical advisor on climate change with Chevron, said his company was acting to shrink its carbon footprint, like others in the sector.
Measures ranged from reducing flaring and emissions from oil and gas production to using more renewable energy in its operations, he said.
“We are doing a lot more than a lot of people say that we are,” he added.
IETA said its new initiative would work to ensure benefits for local communities involved.
Jeremy Manion, who leads on forestry carbon markets for the Arbour Day Foundation, said cutting global emissions to net-zero was a “massive challenge” and would require “unlikely partnerships and collaborations”.
“We live in a very divisive time right now politically and economically, and trees are one of the few things we see… that bring people together across these divides.”
This story was published with permission from Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, resilience, women’s rights, trafficking and property rights. Visit http://news.trust.org/climate.
Thanks for reading to the end of this story!
We would be grateful if you would consider joining as a member of The EB Circle. This helps to keep our stories and resources free for all, and it also supports independent journalism dedicated to sustainable development. For a small donation of S$60 a year, your help would make such a big difference.