04/03/23 - Philip's Carbon Market News
Voluntary Carbon Markets Give A Pittance Of The Proceeds ... - Forbes The voluntary carbon market is under scrutiny once again. Follow the Money has written an expose on the South Pole, the globe’s largest seller of carbon credits. The investigative journalists allege that South Pole exaggerates the number of trees it saves, causing major companies to spread such falsehoods to their customers and shareholders. Earlier this year, the Guardian said Verra — a standard-setting organization — inflates forest preservation by 400%. It noted that 94% of its credits are “worthless.” The World Economic Forum also said voluntary markets lack transparency, causing corporations to question them. Indeed, the voluntary carbon markets are proprietary and outside the purview of national governments. And often, the rainforest projects get a pittance of the proceeds — quite the contrast from REDD+ sovereign carbon credits, monitored by the UN Framework Convention on Climate Change (UNFCCC.) We need to go from a project approach to a national approach, which is more coherent and drives economies of scale,” says Tosi Mpanu-Mpanu, chief climate negotiator for the Congo, in an interview with this writer. “The current voluntary approach is too fractured, with little oversight or transparency. We need to ensure that the citizens of those rainforest lands are fairly compensated and that the bulk of the money does not end up in the hands of investors or bureaucrats. When the money goes to local communities, it must be transparent.” Such inequity has led to some governments putting a moratorium on the voluntary carbon market. That includes countries like Papua New Guinea and Honduras, which say there is no national oversight — only informal reporting from the landowners. They will sell Paris-approved sovereign REDD+ credits.
To that end, the UNFCCC approved the West African country Gabon for 90 million tons of emissions reductions for slowing deforestation between 2010 and 2018. Gabon will reinvest 10% into its forest, creating an eco-tourism industry. But the money will also go into rural development (15%), a Gabonese sovereign fund that invests in future generations (25%), debt service (25%), and health, education, and climate infrastructure (25%).
Honduras is selling 7.7 million sovereign REDD+ credits. It will use the money for sustainable forestry for furniture-making and flooring. It will also build agroforestry businesses such as coffee production while planting trees to restore its forest — all to develop eco-tourism.