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The View | How voluntary carbon markets can tip the scales in the fight against climate change
- Time to address the climate crisis is increasingly precious as carbon emissions rise and pledges go unfulfilled
- Voluntary carbon markets can help firms do their part by accelerating the shift to a net zero economy as long as the credits they buy are of high quality
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Why you can trust SCMP
Since the Paris Agreement was adopted in 2015, the trajectory of carbon emissions has been going up – not down – apart from a dip during the peak of the Covid-19 pandemic.
The transition to reach 45 per cent carbon reductions by 2030 and net zero by 2050 needs to accelerate, having been interrupted by the pandemic, supply chain disruptions, high inflation and the rising costs of energy, as well as geopolitical tensions. The US-China Joint Glasgow Declaration on Enhancing Climate Action is on hold as climate talks between the two countries remain suspended.
With world leaders gathering for the UN climate summit in Egypt in November, more action is urgently needed to reduce carbon emissions and limit a global temperature rise to 1.5 degrees Celsius compared to pre-industrial levels.
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When used by companies to complement rather than substitute the decarbonisation of their own operations as they transition to net zero, the voluntary carbon market is one tool that could accelerate action to tackle climate change. Some exchanges across Asia, such as Hong Kong Exchanges and Clearing (HKEX), have plans to launch platforms to support these types of markets.
Helping companies to decarbonise, including across their entire value chain, is therefore paramount. This is known under carbon accounting frameworks as their Scope 3 emissions, with Scopes 1 and 2 covering emissions related to using their own buildings, factories and so on and the energy they purchase.
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China scales back emissions target with half of new electricity use to come from renewables by 2025
China scales back emissions target with half of new electricity use to come from renewables by 2025
There are many solutions to reduce these emissions, such as renewable energy, electric vehicles, efficient home insulation, low-emissions lighting and ground or air source heat pumps. They are now moving into the mainstream and must be financed at scale.
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