Carbon credits: Asian Development Bank urges caution
Published on: Saturday, March 09, 2024
By: Sherell Jeffrey
Henry indicated that this highlights a fundamental flaw in the carbon offset system, as it allows polluters to continue emitting carbon without making significant efforts to reduce their emissions. The forest of Borneo (right)
Kota Kinabalu: Asian Development Bank (ADB) Counsel Henry Cornwell said stringent regulations and oversight is needed to ensure carbon credits are not used as a loophole for polluters to avoid taking action to reduce their emissions.
“You may already know what a carbon credit is. Carbon credit is a reward for a certain amount of carbon that a rights holder stores such as the owner of a forest.
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“By planting trees, a credit can be made that can be given to a polluter as a way to get them to either follow the law or voluntarily agree to cut down on carbon emissions,” said Cornwell at the Borneo Rainforest Law Conference’s session on “Natural capital and nature-based solutions to climate change – market and non-market mechanisms”.
“The idea behind carbon credits is to incentivise actions that reduce carbon emissions or sequester carbon, such as planting trees or investing in renewable energy projects.
“Carbon credits can be a useful tool for encouraging polluters to reduce their emissions. By purchasing carbon credits, polluters can offset their emissions by supporting projects that reduce emissions elsewhere.
“However, some of the biggest polluters are also the biggest buyers of carbon offsets, yet their emissions continue to rise.
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The fact that some of the biggest polluters also buy the most offsets while their emissions keep going up says a lot,” said Cornwell who joined ADB in 2020 supporting the operations of the Pacific and South Asia Regional Departments.
He indicated that this highlights a fundamental flaw in the carbon offset system, as it allows polluters to continue emitting carbon without making significant efforts to reduce their emissions
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“The only way offsets could save us from a climate disaster is if they met a few conditions,” said Cornwell who was admitted as a solicitor in the Supreme Court of New South Wales and the High Court of Australia in 2016.
“Firstly, they must be in line with the Intergovernmental Panel on Climate Change’s (IPCC) goal of keeping global temperatures to 1.5 degrees above pre-industrial levels and cutting carbon dioxide emissions in half by 2050.
“There are a lot of carbon processes and claims that do not really connect to this kind of goal,” said Cornwell whose work involves engaging in multilateral environmental initiatives including drafting of the Multilateral Development Bank Common Principles for Tracking Nature-Positive Finance.
“Secondly, all offsets should be in line with problems that are based on science. This means we should only support using carbon credits to cancel out pollution that cannot be stopped, reduced, or fixed or to pay for more mitigation measures than the science-based goals for reducing emissions.
“In any case, we should also not back the use of avoidance tasks. This will make sure that the initiatives are in line with the UN because the UN Global Contact is behind the science-based goals. It will also help companies that want to invest avoid greenwashing.
“Thirdly, we need to deal with major sources of disagreement and, most importantly, figure out how to stop fake credits from getting into the market.
“What to do when they show up and what to do about valid points that get messed up when the carbon on each death number is released later because of something like a drought or a bush fire?
“When it comes to biodiversity points, we need to be very careful. There is already evidence that our fixation on carbon offsetting is turning grasslands, which provide jobs for 800 million people and hold about a third of the world’s carbon, into forests, often with single-species plants that can be harmful to the local environment.
“It may also be easy to think of one round of carbon emissions as equal to one round of carbon stored. But can we really make up for the loss of an ecosystem? This is a question we need to ask ourselves. The most important thing is that our answers should be in line with the just transition,” he said.
He said that while carbon offsetting could play a role in reducing emissions, it should not come at the expense of biodiversity-rich ecosystems like grasslands.
He suggested that efforts to combat climate change should be integrated with biodiversity conservation strategies. This includes promoting sustainable land management practices that maintain the biodiversity and ecosystem services provided by grasslands, while also sequestering carbon.
He also emphasised the importance of protecting the livelihoods of the poor and vulnerable.
“At the community level, we need to protect the poor and vulnerable ways of making a living. We need to protect and use the knowledge, customs, and rules of indigenous people when they are involved.
“There is a need to ensure that efforts to protect natural capital do not disproportionately harm those who rely on natural resources for their livelihoods. This includes supporting sustainable practices that enable communities to continue making a living without depleting their natural resources,” he said.
He also believed that indigenous peoples have valuable insights and practices that can help protect ecosystems and biodiversity.
In addition, he advocated for international cooperation to support green and inclusive development, particularly in the Global South.
“We need to encourage governments and companies around the world to protect their natural capital by sending money to other countries to support green and inclusive development, especially in the Global South.
“The 80 days energy transition mechanism is a good example of this. It is hard to deal with the triple planetary disaster of climate change, biodiversity loss, and pollution.
Thus, we need community engagement in pushing for sustainable policies and practices from our leaders.
“By looking to nature, I believe we can learn how to better conserve and protect our natural resources. Nature can help us figure out what is wrong, but it cannot always save us from our own mistakes. That old saying can point us in the right direction, though.
“The economic benefits of conservation and understanding the true value of our natural wealth can lead to policies that prioritise conservation. By setting the right price for nature, we can incentivize conservation efforts and allow nature to heal itself,” he said.
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