Monday, July 4, 2022

Global voluntary carbon market must grow 15 fold to meet Paris goals: report By Reuters


© Reuters. U.N. Climate Change Conference (COP25) in Madrid

By Susanna Twidale

London (Reuters) – Global voluntary carbon credit markets must grow 15 fold by 2030 to enable companies and organisations to meet goals set under the Paris climate agreement, a private sector task force said on Tuesday.

Many global companies such as oil majors Shell (LON:) RDSa (NYSE:).L and BP (NYSE:) BP.L, and e-commerce giant Amazon (NASDAQ:) AMZN.O have pledged to reach net zero emissions but will need to buy or generate carbon credits to offset the emissions they are unable to cut from their operations.

“To facilitate this global decarbonization there is a need for a transparent, verifiable and robust voluntary carbon market,” a consultation document by the Taskforce on Scaling Voluntary Carbon Markets said on Tuesday.

The Taskforce is made up of around 50 members from companies such as Shell and BP, Tata Steel and airline Etihad and is sponsored by global finance association the Institute of International Finance.

The voluntary carbon market will need to grow more than 15 fold to around 2 billion tonnes of carbon credits a year by 2030 to enable this to happen, the document said.

The Taskforce identified several areas of work including establishing principles to ensure market integrity, setting clear standards, and building infrastructure such as financing and trading capabilities.

“Establishing a fair price for carbon offsets in a transparent and liquid market will allow those who seek to reduce their carbon footprint to more easily fund those who invest in actual carbon reduction projects,” Bill Winters, Group Chief Executive of Standard Chartered (OTC:) and Taskforce chair, said in a statement with the report.

Action should be taken to help distinguish between projects that avoid or reduce emissions such as renewable energy and those that remove emissions such as reforestation or carbon capture projects, it said.

The Taskforce was convened in September to take stock of existing voluntary carbon markets and is seeking responses to the consultation from stakeholders.

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