Page 25 - bne IntelliNews monthly magazine December 2024

bne December 2024 Companies & Markets I 25
separates us from achieving the 1.5C target,” said Michaelowa.
But there are still concerns. At COP28 in Dubai, it became clear that a lot of African forest had been sold off in carbon trade deals to a start-up company run by a member of the Dubai royal family, said The Guardian. The revelation raised fears of a scramble for the continent’s resources, in this case those that help limit emissions.
“We have to learn the lessons of past mistakes and watch for new ones this system could create, otherwise we risk the Paris Agreement becoming a market failure”
A study in Nature Communications published in mid-Novem- ber analysed 2,347 carbon mitigation projects, or one-fifth
of the credit volume issued globally to date, or almost 1bn tonnes of CO2e. The researchers found that less than 16% of the carbon credits issued to the investigated projects consti- tuted real emission reductions. “Carbon crediting mecha- nisms need to be reformed fundamentally to meaningfully contribute to climate change mitigation,” they said.
“The available evidence suggests that many carbon cre- dits are not backed by any actual emission reductions,”
Dr Lambert Schneider, a co-author and a senior researcher at the Oeko-Institut in Berlin, told The Guardian. “These prob- lems would undermine the Paris Agreement if they spilled
into the official UN system. If these quality issues continue under Article 6, this could undermine our efforts to achieve our climate targets. It is critical that we fix the integrity issue of the market,” he said.
“If these credits are used by buyers to emit more, this would result in more carbon added to the atmosphere. And the potential for issuing such credits is very large,” he concluded.
“The new rules are a start, but the risk of abuse still remains alive and well,” Injy Johnstone, research fellow at the Univer- sity of Oxford, told the newspaper. “We have to learn the lessons of past mistakes and watch for new ones this system could create, otherwise we risk the Paris Agreement becom- ing a market failure,” she noted.
However, the rules contain several serious flaws that years of debate have failed to fix. It means the system may essentially give countries and companies permission to keep polluting, argued the University of Melbourne’s Kate Dooley after the deal was struck in The Conversation. The deal is seriously flawed, she said.
There could be double counting. Indigenous communities might, for example, lose access to land planted with trees. The carbon stored in trees may not be sequestered for as long as the emissions from a coal company in the developed world stay in the atmosphere, she said. Wildfire and drought may interfere with carbon storage in forests.
“[Australia] could also set a precedent by establishing a framework that treats carbon removals as a complement – not a substitute – for emissions reduction,” she suggested.
A jungle in Panama. A carbon credit could include an investment by a high polluter in the planting of trees elsewhere to lower CO2 emissions. / Paul Harrison
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