The recent critiques of nature-based carbon offsetting provide us with an excellent opportunity for a sober reality check on what’s happening in the market, Steven Lutz writes.
The world is facing a climate emergency. Yet, reducing greenhouse gas emissions alone won't be enough: we must also remove carbon from the atmosphere.
The United Nations Intergovernmental Panel on Climate Change's landmark report published earlier this month highlighted the urgent need for more ambitious action to address it, insisting on immediate actions to mitigate the unfolding climate crisis.
This is where market-based efforts to reduce carbon emissions come into play.
Carbon offsets could indeed become meaningless
Through the use of nature-based carbon offsets, we can go some way to compensate for the hard-to-eliminate emissions of carbon dioxide.
Offsets can support climate solutions such as the conservation and restoration of forests. But they shouldn’t be seen as a get-out-of-jail-free card for polluting industries — offsets need to be accompanied by actions to reduce emissions.
Carbon offsets are bought and sold on carbon markets to incentivise emissions reductions, making it economically attractive for companies to invest in emission reduction solutions.
However, recent opinion articles and investigations, such as Euronews’ "Carbon offsets don't work. It's time for the EU to change its approach" and The Guardian’s "Revealed: more than 90% of rainforest carbon offsets by biggest certifier are worthless, analysis shows," have exposed major issues regarding the integrity of nature-based carbon offsetting.
If market-based actions are not mitigating carbon emissions, the whole premise of using carbon offsets as a tool to reduce emissions becomes meaningless.
In such a scenario, supporting market-based action would indeed be of little point, as it would not lead to any actual reduction in emissions.
There are legitimate offsetting projects, too
Nature-based carbon offsets were never intended to “save us”; instead, they represent one of a suite of actions needed to address emissions.
Decades of research indicate that the conservation and restoration of forests are effective in increasing the capture and storage of carbon dioxide.
Therefore, developing this into a market-based mechanism has the potential to be one of the actions to address climate change, with the added benefits of helping ecosystem conservation and recovery and transferring much-needed financial support to the Global South.
It is important to note that there have been instances of fraudulent or problematic nature-based carbon offsets sold in the past. However, there are also legitimate offsetting projects that effectively reduce and mitigate emissions.
Two shining examples from Kenya are the Mikoko Pamoja community-based mangrove conservation project, which along with its sister project Vanga Blue Forest, illustrate world-leading examples of how carbon offset initiatives can equitably and justly benefit communities.
Companies such as Microsoft prioritise the purchase of carbon offsets with multiple benefits. In Kenya, these projects help people protect mangrove forests while also benefiting the community through the sale of carbon offsets.
The building of freshwater wells and the purchase of hospital equipment and schoolbooks for local children have all been made possible thanks to the carbon revenue.
Financial transparency and gender equity are core components of project oversight and organisation.
Countries around the globe are taking notice
A critical next step in developing high-integrity nature-based carbon offsetting is ensuring robust governance of the market.
National governments are responsible for managing the benefits and risks to their citizens of engaging in the carbon market.
Even with the positive Kenyan examples, the recent critical articles illustrate that a national approach may be needed to address issues such as additionality, leakage, and permanence and to truly upscale and sustainably manage benefits.
In addition to improved governance, independent verification and standards may be required to help maximise and target carbon offset benefits for communities and countries rather than just conventional market players.
And countries are taking note. The need for high-integrity coastal and marine nature-based – or “blue carbon” – offsetting was a hot topic of discussion in an open session at the recent dialogue meeting of the International Partnership for Blue Carbon, for example.
National forums recognising the need for enhanced nature-based carbon market governance have also recently been held in Indonesia and Papua New Guinea.
From the Kenyan experience, we can envision high-integrity nature-based carbon offsets that can provide carbon, community, and biodiversity benefits in a way that is accountable and verifiable.
Criticism can only help the carbon market
The recent critiques of nature-based carbon offsetting provide us with an excellent opportunity for a sober reality check on what’s happening in the market.
By all means, let’s review the current projects and see if they deliver on their carbon, community and biodiversity promises.
Let’s also focus on making the market work specifically for communities and countries, creating a north-south revenue stream that values nature and where carbon offsets can play a role in its protection if done right.
The Kenyan experience illustrates that community-based carbon offsetting can work, and governments are expressing their desire for action.
For the market to flourish and make real progress in the fight against climate change, it needs to hear the criticism and evolve.
Steven Lutz is a Senior Programme Officer and Blue Carbon Lead for GRID-Arendal, a Norwegian foundation and collaborating centre of the United Nations Environment Programme.
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