Guest view: Offsets reach moment of maturity

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5 minute read

People plant trees in the Happy Tree park on World Cleanup Day in Jelgava, Latvia September 18, 2021.

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SAN JOSE, Sept 24 (Reuters) - With barely a month to go before the crucial United Nations climate change conference in Glasgow, there’s no guarantee humanity will do what is necessary to keep warming under 1.5 degrees Celsius, identified by scientists as the maximum prudent temperature increase. That’s the bitter reality pill we must swallow today.

At the same time, we have to hold firm to our conviction that the 1.5 degrees temperature ceiling is still achievable, and that we do not have any other option but to achieve it.

It’s still our responsibility to take every action possible, at speed, to safeguard our climate. That includes massive emission reductions, and absorbing carbon dioxide already in the atmosphere - through nature first, and eventually also via industrial processes. When emission reductions or absorption is counted toward the efforts of an entity that did not directly reduce or absorb them, it is known as an offset.

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Although it was highly regulated in the past, today carbon offsetting is voluntary and unregulated with a multitude of maddening loopholes. Like 1.5 degrees, it also comes without a guarantee. This summer vast swathes of forest offsets bought by big emitting companies to help balance their carbon books went up in flames. There have been renewable energy projects that would have happened anyway and others where local communities on the frontline didn’t see a penny for their hard work.

Today, the voluntary offsetting market has recognized these shortcomings and is quickly evolving. Work is well underway to put integrity at the center of that market ahead of COP26.

A new governing body, comprising expertsin the fields of finance and nature conservation, is being set up to oversee and help build confidence in offsetting as one of the many tools we need to reach net-zero emissions. This is a market that has the potential to grow to $100 billion by the end of this decade, if it moves beyond the mistakes of its youth.

Offsetting is not perfect, and even with proper governance there will still be challenges. But here’s the caveat: we are not living in a perfect world. We have not yet decarbonized our economies, and the resulting damages are coming hard and fast.

We cannot afford to ignore any lever that will help accelerate decarbonization. Today, nearly a third of U.S. citizens are living in a state or county that has been declared a disaster zone. And the growing intensity of climate impacts is outstripping the ability of some of the world’s 90 poorest countries to cope.

Offsets are a necessary part of our efforts to build resilience to future disasters, in order to improve the quality of human life on our planet for decades to come.

In my home country of Costa Rica, they are making a difference: Offsets have generated $30 million in funding over nearly a million hectares, which is helping to protect and restore our tropical forest cover, while improving livelihoods for local people.

Done with integrity, with decent rules and accountability mechanisms, offsets can help companies and countries big and small on their journey to our net-zero future, while supporting communities on the ground.

What offsets are not, even with the highest degree of integrity, is a pass to continue emitting. We still have to cut our emissions in half this decade.

So as companies adopt science-based targets for climate, their plans should follow this order of priority: decarbonize first, offset second, and establish a timeline for the use of ever fewer offsets.

Meanwhile, voluntary markets with high integrity are a critical step toward an eventually agreed and internationally regulated carbon market. As it develops, it’s critical we ensure rules on offsets at all stages of maturity are aligned with those governing how companies report on their emissions and emission reductions.

Governments must also accelerate their efforts to deliver a regulated, proper price on carbon that rewards those taking real action.

And markets need to be transparent and inclusive, offering the possibility for everyone, including indigenous people and the rural poor that live in and work on offset projects, to reap the benefits.

If we are handed a mechanism by which the companies most responsible for causing climate change pay a share of the costs for solving it, and that can deliver rapid access to finance today, then it would be folly to ignore it. Polluter pays is an age-old principle that has proven its efficacy.

Voluntary carbon markets are not the silver bullet, but they are an important step toward an agreed regulated market, without which we will not achieve the Paris target.

The work of the Taskforce on Scaling Voluntary Carbon Markets and the associated Voluntary Carbon Markets Integrity Initiative is urgent and must be supported. The new governing body marks a moment of maturity for offsets, and we should welcome it.

CONTEXT NEWS

- Christiana Figueres is co-founder of Global Optimism and was formerly executive secretary of the United Nations Framework Convention on Climate Change, where she oversaw the 2015 Paris Agreement.

- She co-presents the climate podcast, Outrage + Optimism, and co-authored the best-seller, “The Future We Choose: The Stubborn Optimist’s Guide to the Climate Crisis”.

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Editing by George Hay and Karen Kwok

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