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NEW DELHI: As countries gear up for the upcoming UN climate conference (COP28), the New Delhi-based think tank, Centre for Science and Environment (CSE), has brought a spotlight on voluntary carbon (dioxide) offset markets by highlighting how “cloaked-in-secrecy world of voluntary trade in carbon credits” might be doing much more harm than good, and seems to be working for the interests of project developers, auditors, verifiers and registries.
Pitching for regulating such trade globally through creating an official carbon market, the CSE has sought negotiators to frame rules in such a way that the carbon credits must work for combating climate change as the issue is expected to figure prominently during COP28, scheduled to be held in Dubai from November 30 to December 12.
The global market for carbon offsets falls under Article 6.4 of the Paris Agreement on climate change, adopted in 2015. Though countries agreed on a rulebook governing the carbon market during COP26 at Glasgow in 2021, the critical issues regarding necessary administrative infrastructure for the multilateral carbon credit market and accounting methodologies to avoid the risk of leakage and double counting remain unresolved.
Ahead of the negotiations to fill these gaps by countries in Dubai, the CSE has highlighted many flaws of the existing voluntary carbon market in the Indian context through an investigation conducted by its researchers over the past six months.
Its detailed investigative report – titled ‘Discredited: The voluntary carbon market in India’ – claimed to have covered 40 villages and towns across India to understand how the market works and found that though communities, their lands and their labour were central to the business/projects, such stakeholders were almost never aware that they were working to generate carbon credits. Besides, they had no rights of their own over those credits, it added.
“We wanted to find out if this market was working to benefit people and the planet. What we found was there is much that needs to be done…The carbon market should be a real market and not a secret pact between buyer and seller,” said Sunita Narain, director general, CSE, referring to findings of the investigation.
Underlining the accountability issue in the absence of an official mechanism, the think tank flagged that the voluntary carbon markets currently operate without regulatory oversight, and lack uniformity and standardization. “They are managed through a paraphernalia of registries, project developers, validators and verifiers, traders, brokers, and carbon exchanges,” it said.
Carbon Market: A tool to combat climate change
CARBON CREDITS
*Credits are assigned to projects that can reduce greenhouse gases
*These credits, measured in tonnes of carbon dioxide-equivalent (CO2e), are then priced and traded
*People and businesses that wish to offset their emissions can buy these credits and ‘neutralise’ their carbon footprints
CARBON MARKET
*The world, however, does not have an official carbon market yet for such trade
*So, a voluntary carbon market exists for trading
*The world has two leading carbon registries – Verra and Global Standard
*Together, they have registered 6,481 projects across the globe till May, 2023
*They have issued 1.4 billion carbon credits
INDIAN SCENE
*India is the world’s second-largest supplier of carbon offsets
*India’s voluntary carbon market is worth over $1.2 billion
*India has 1,451 projects listed with the two registries
*Indian entities have already earned about $652 million from carbon credits used to offset emissions
Pitching for regulating such trade globally through creating an official carbon market, the CSE has sought negotiators to frame rules in such a way that the carbon credits must work for combating climate change as the issue is expected to figure prominently during COP28, scheduled to be held in Dubai from November 30 to December 12.
The global market for carbon offsets falls under Article 6.4 of the Paris Agreement on climate change, adopted in 2015. Though countries agreed on a rulebook governing the carbon market during COP26 at Glasgow in 2021, the critical issues regarding necessary administrative infrastructure for the multilateral carbon credit market and accounting methodologies to avoid the risk of leakage and double counting remain unresolved.
Ahead of the negotiations to fill these gaps by countries in Dubai, the CSE has highlighted many flaws of the existing voluntary carbon market in the Indian context through an investigation conducted by its researchers over the past six months.
Its detailed investigative report – titled ‘Discredited: The voluntary carbon market in India’ – claimed to have covered 40 villages and towns across India to understand how the market works and found that though communities, their lands and their labour were central to the business/projects, such stakeholders were almost never aware that they were working to generate carbon credits. Besides, they had no rights of their own over those credits, it added.
“We wanted to find out if this market was working to benefit people and the planet. What we found was there is much that needs to be done…The carbon market should be a real market and not a secret pact between buyer and seller,” said Sunita Narain, director general, CSE, referring to findings of the investigation.
Underlining the accountability issue in the absence of an official mechanism, the think tank flagged that the voluntary carbon markets currently operate without regulatory oversight, and lack uniformity and standardization. “They are managed through a paraphernalia of registries, project developers, validators and verifiers, traders, brokers, and carbon exchanges,” it said.
Carbon Market: A tool to combat climate change
CARBON CREDITS
*Credits are assigned to projects that can reduce greenhouse gases
*These credits, measured in tonnes of carbon dioxide-equivalent (CO2e), are then priced and traded
*People and businesses that wish to offset their emissions can buy these credits and ‘neutralise’ their carbon footprints
CARBON MARKET
*The world, however, does not have an official carbon market yet for such trade
*So, a voluntary carbon market exists for trading
*The world has two leading carbon registries – Verra and Global Standard
*Together, they have registered 6,481 projects across the globe till May, 2023
*They have issued 1.4 billion carbon credits
INDIAN SCENE
*India is the world’s second-largest supplier of carbon offsets
*India’s voluntary carbon market is worth over $1.2 billion
*India has 1,451 projects listed with the two registries
*Indian entities have already earned about $652 million from carbon credits used to offset emissions
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