Wall Street’s favourite climate solution is mired in disagreements

The solution to global warming could be better trading; with polluters on one side and carbon elimination and capture projects on the other. A market that turns carbon into a commodity could effectively transfer capital from emitters to fixers. This is the idea behind Mark Carney’s Taskforce. He aims to launch a pilot programme before November’s COP26. Disagreements have arisen within Taskforce in relation to execution. These include 1) defining which companies can use offsets to reach their climate goals; 2) securing endorsement by climate players; 3) establishing governance of the global voluntary market; and 4) assessing whether ‘avoided emissions’ (which account for the majority of offsets) should form part of net zero plans. There are calls for standards setting in order to establish a recognised ‘core carbon principle’ label; akin to the labelling of groceries as ‘organic’. Carney claims the carbon offset market could be worth US$100bn by 2030 (vs US$300m by 2018). On the basis that the 18 oil majors (with net zero goals) offset their 3.3bnt of emissions, that would require c.18x 2020 offset volumes.

Adapted from an article by Bloomberg

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Bill Goldie

Head of Carbon Offsetting

Tel. : 02036371055 

Email: bill.goldie@redshawadvisors.com