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Worldwide carbon market will need to see a fifteenfold growth for Paris Accords

Carbon markets could help drive investment for renewable energy projects, such as solar power plants. Photo:Getty


Worldwide carbon market will need to see a fifteenfold growth for Paris Accords


By Patryk Krych | The World Daily | NOVEMBER 9th 2020


According to a private sector task force who spoke on Tuesday, by the year 2030, the voluntary global carbon market will need to see a growth of fifteenfold if there is to be an acceptable change that would meet the goals set out by the Paris Climate accords back in 2015.

A recent consultation report made by the Taskforce on Scaling Voluntary Carbon Markets had found that the global carbon market would have to grow fifteenfold, which would mean a growth to somewhere around 2 billion tonnes of carbon credits a year by the year 2030 if the Paris Climate Accords are to be met.

The Taskforce is sponsored by the Institute of International Finance, a global finance association. The bulk of its 50 members are from such companies as BP, Tata Steel, Shell, and other such companies with typically major impacts on carbon emissions and environmental degradation.

“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,” said the Group Chief Executive of Standard Chartered and Taskforce chair, Bill Winters. His statement was included with the report.

“As the decarbonization of the global economy accelerates in the coming years, demand for voluntary offsetting will likely increase,” the report wrote. “That demand is more likely to be met if a large-scale, voluntary carbon market takes shape, which is able to help companies achieve net-zero and net-negative goals. The scale up will need to be significant.”

The report was mainly handled by the Taskforce, which had come into existence sometime in September by Mick Carney, former Bank of England governor and United Nations special envoy for climate action. The Taskforce is convinced that the voluntary global carbon market is the key to reaching the climate goals, as it puts focus on carbon-heavy companies and encourages them to limit their emissions.

“This is a market that’s $300 million right now -- it’s a joke,” Carney stated during an interview with Bloomberg Television on Monday, only a day before the release of the report. “It should be measured in the tens of billions if not the hundreds of billions.”

Some major oil companies, such as BP, Shell, and even delivery and e-commerce companies such as Amazon had all signed up for the Paris Climate Accords, promising to help limit their carbon emissions. Certain emission will be impossible to cut from their typical operations, thus their need to either purchase or generate some compensational carbon credits.

“To facilitate this global decarbonization there is a need for a transparent, verifiable and robust voluntary carbon market,” the consultation report had written.

The Taskforce stated that companies who purchase carbon credits are thus able to compensate for the carbon emissions that haven’t yet been manageably removed. This is a means of buying an offset in the voluntary carbon market, that still leads to some progress towards limiting carbon emissions in a manner that contributes to the achievement of the Paris Accords climate goals by 2030.

The Taskforce had established that they would still need to introduce certain principles that would help improve the integrity of the market overall. Action must also be taken to ensure that a clear difference between reducing emissions and removing emissions (through means such as reforestation or establishing carbon-capture projects) is made. How this develops is yet to be seen, but a fifteenfold growth in the market may be difficult to achieve. The Taskforce is eager to try and make headway with this recent consultation report and hope it can help with achieving the goals of the Climate Accords.


By Patryk Krych | © The World Daily 2020