Inside Out | Raging wildfires call into question carbon trading’s role in climate change fight
- Carbon trading has been called ‘a false solution to the climate crisis’, while forest offset schemes in the West are in peril as wildfires rampage
- Yet, carbon markets are here to stay and the world must make them work in reaching climate change goals
For the lobby group Global Witness, it is a “corporate offsetting fallacy”. For companies watching wildfires rage across California, it is seeing your “net zero” ambitions go up in smoke. It is the business of buying “offsets” to help your company tell the world it is on track to reach “net zero” carbon emissions by 2050.
Whether carbon trading and offsetting meaningfully contributed to achieving “net zero” by 2050 seemed incidental, as market traders made fortunes creating new financial products that helped global enterprises embrace environmental virtue.
With an estimated 64 carbon pricing markets now active globally, and another 30 under development – Hong Kong Exchanges and Clearing has just set up the Hong Kong International Carbon Market Council – there are many happy to use these markets to meet their “net zero” challenges.
A Corporate Climate Responsibility Monitor report released by the NewClimate Institute and Carbon Market Watch in February examined 25 of the world’s biggest companies and found that half of them have no absolute emissions-reduction goal for their “net zero” target year. The report also revealed that 19 of the multinationals intend to use offsets to reach their climate targets.
Global Witness says carbon trading is “a false solution to the climate crisis”, which allows companies to wield offsets “as environmental credentials, while using them as a permit to pollute”. It adds: “Companies cannot continue to use offsetting as a crutch for their climate responsibility claims, because it simply isn’t viable.”