Carbon credits are useful for climate stabilization, but are they used effectively?

This article was originally published on The Conversation, an independent, nonprofit source of news, analysis and commentary from academic experts. Disclosure information is available on the original website.

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Authors: Patrick Faubert, Professor – Industrial Ecology and Climate Change Mitigation, Université du Québec à Chicoutimi (UQAC); Charles Marty, Assistant Professor, Université du Québec à Chicoutimi (UQAC); Claude Villeneuve, titular professor Chaire en éco-conseil spécialiste des changements climatiques, Université du Québec à Chicoutimi (UQAC); and Sylvie Bouchard, Agent de recherche/coordonnatrice, Université du Québec à Chicoutimi (UQAC)

To have a chance of achieving the Paris Agreement goal of stabilizing the global climate at a level less than 1.5°C above the pre-industrial average, humanity would have to become carbon neutral between 2050 and 2070 and then demonstrate a negative carbon balance .

This was the assessment made by the Intergovernmental Panel on Climate Change (IPCC) in its 2018 special report. The same conclusion was repeated in its latest report.

There are doubts whether this target will be achieved: in 2022, greenhouse gas (GHG) emissions reached a new record. The efforts made by countries and their commitments for 2030 are largely insufficient. Moreover, the upward trend seems likely to continue in 2023. This will be even more difficult as 80% of the world’s primary energy supply still depends on fossil fuels.

In the face of this challenge, one solution may be offsetting greenhouse gas emissions. However, while offsetting can be effective and is a necessary tool to limit global warming, critics see it as a way for some people to avoid reducing greenhouse gas emissions and instead engage in “eco-dark” money laundering.

As professors and researchers at the Département des sciences fondamentales (Faculty of Basic Sciences) at the Université du Québec à Chicoutimi (UQAC), we study the issue of climate change and, in particular, how the boreal forest could help mitigate it.

What is carbon offsetting?

Carbon offsetting allows a greenhouse gas emitter who wants to reduce its emissions balance to pay a third party to eliminate emissions sources or capture CO2 already present in the atmosphere.

Offsetting was originally intended as a “flexible mechanism” in the Kyoto Protocol negotiated in 1997 by the parties to the United Nations Framework Convention on Climate Change (UNFCCC).

This made it possible to encourage the participation of developing countries that were not subject to emission reduction targets. It was enough to implement projects that were lower in emissions than the reference scenario. They could then offer “credits” to countries trying to achieve these goals in exchange for remuneration, thus generating “clean development”.

There are two types of projects that create offset loans. In the first case, greenhouse gas emissions into the atmosphere are avoided compared to the baseline scenario (current practice). The second one produces the so-called negative emissions, i.e. it removes CO2 from the atmosphere. These include the removal and storage of CO2 in biological (e.g. tree plantations), geological and ocean reservoirs or products (e.g. ocean fertilization).

Countries, large corporations and cities that have made carbon neutrality commitments are now incorporating this type of offsetting into their plans, using a variety of means and with varying degrees of success.

Reducing greenhouse gases remains a priority

Of course, reducing emissions at source remains a priority. To do this, we need to carry out emission inventories to detect “hot spots” so that we can apply effective measures to reduce or even eliminate emission sources.

Efforts to reduce emissions to date have mainly focused on decarbonising energy or materials (for example, by replacing high-carbon energy sources such as coal with low-carbon or renewable sources). This, of course, is not enough: in the 30 years since the UNFCCC, emissions and concentrations of target greenhouse gases have continued to increase.

Indeed, reducing emissions on a global scale is difficult to achieve in the context of population growth. Decoupling – breaking the link between economic prosperity and resource and energy consumption – is not yet complete. If this cannot be achieved, the only solution will be to reduce the production of goods and services that emit too much.

But should we, for example, question an innovation that brings tangible benefits to achieving the Sustainable Development Goals (SDGs) because it causes new greenhouse gas emissions? Producing food, housing and basic services will still be necessary to ensure that a human population that is not expected to plateau for at least a generation can live with dignity and achieve the Sustainable Development Goals by 2030 and beyond.

Progress was made at the Conference of the Parties (COP28 Summit) on Climate Change in Dubai in December 2023. Fossil fuels are expected to be phased out. However, these fuels are still expected to account for a significant share of primary energy consumption in 2050.

Not everyone is equal in carbon markets

Most scenarios presented by the IPCC and other bodies include carbon offsetting mechanisms to achieve carbon neutrality by 2050. However, the offsetting principle covers several methods and types of projects (use of more energy-efficient equipment, building insulation, afforestation) and is not always easy in navigation.

Many critics argue that the use of offset credits is a way to avoid emissions reduction efforts, and that claiming carbon neutrality or “net zero” is simply a form of environmentalism.

Since 2001, regulatory and voluntary carbon markets have grown and can use this mechanism as economic leverage, but this has drawbacks. These markets have sniffed out opportunities and produced a lot of credit whose credibility has been questioned, sometimes with good reason.

A recent study conducted jointly by the Swiss Federal Institute of Technology (ETH) in Zurich and the University of Cambridge analyzed the effectiveness of over 2,000 projects aimed at generating offset credits. It showed that only 12 percent of the announced greenhouse gas reductions were actually achieved, mainly because baseline scenarios were inadequate.

This happens, for example, when an organization prepares a forest conservation project claiming that the forest would be cut down or burned when such a scenario was not foreseen or inevitable. Many projects are flooding the market with these types of carbon credits (including in parts of the world where the market is well regulated, such as California), even though at best they protect existing carbon stocks and ultimately do not remove any greenhouse gases from the atmosphere.

Criteria for monitoring carbon dioxide emission allowances

There are different quality offset loans and sometimes it is difficult to understand them all.

To prevent the offsetting principle from being used for greenwashing, it is important to control the quality of carbon dioxide emission allowances issued on the market. It is up to offsetters to ensure the quality of the credits they use in their carbon neutrality strategy.

Microsoft is one of the most demanding companies in this respect and has prepared an in-depth analysis of the credits it could potentially purchase to eliminate residual emissions. The selection was strict and excluded several loan categories that were already on the market.

Carbon offsetting is therefore essential to achieving our climate goals. However, selecting high-quality carbon credits or offsets requires more in-depth research on the part of offsetrs and certainly more discipline on the part of the various markets to avoid the greenwashing trap.

A good start would be to choose transparent organizations with a public register of offsets granted, projects that comply with international standards and are subject to external verification.

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Patrick Faubert is co-director of the Carbone boréal project at the University of Québec à Chicoutimi.

Charles Marty is a member of the Carbone boréal project at the University of Québec à Chicoutimi.

Claude Villeneuve is co-director of the Carbone boréal project and head of Eco-Consulting at the Université du Québec à Chicoutimi.

Sylvie Bouchard is coordinator of the Carbon boréal project at the University of Québec à Chicoutimi.

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This article is republished from The Conversation under a Creative Commons license. Disclosure information is available on the original website. Read the original article: https://theconversation.com/carbon-credits-are-useful-for-stabilizing-the-climate-but-are-they-used-effectively-230608

Patrick Faubert, Professor – Industrial Ecology and Climate Change Mitigation, Université du Québec à Chicoutimi (UQAC); Charles Marty, Assistant Professor, Université du Québec à Chicoutimi (UQAC); Claude Villeneuve, titular professor Chaire en éco-conseil spécialiste des changements climatiques, Université du Québec à Chicoutimi (UQAC); and Sylvie Bouchard, Agent de recherche/coordonnatrice, Université du Québec à Chicoutimi (UQAC), Conversation