SPECIAL REPORTS AND PROJECTS
Offsets don’t stop climate change.
Shortly before COP26, Amazon Watch and more than 170 organisations signed on to a statement under the headline “Offsets don’t stop climate change”.
The headline is borrowed from a December 2020 letter to the Financial Times in response to an editorial about Mark Carney’s Taskforce on Scaling Voluntary Carbon Markets.
The letter, from Doreen Stabinsky (College of the Atlantic, USA), Wim Carton (Lund University, Sweden), Kate Dooley (University of Melbourne, Australia), Jens Friis Lund (University of Copenhagen, Denmark), and Kathy McAfee (San Francisco State University, USA), states that, “Offsets don’t stop climate change because they don’t stop emissions.”
They write that,
In an ideal world, some types of offsets might theoretically balance out emissions with removals. But the whole point of an offset is that one entity gets to keep emitting.
And they explain that the problem is that with continued emissions, CO2 continues “to accumulate in the atmosphere where it resides for hundreds to thousands of years, and the temperature of the planet continues to increase”.
They point out that the oil industry is a primary beneficiary of offsetting and Carney’s taskforce was stacked with respresentatives of Big Polluters:
All the major oil companies are planning to continue with exploration and new extraction projects. None of them have plans for a managed decline of production that is anywhere near in line with the Paris goal aiming to limit warming to 1.5C. Indeed some fossil fuel majors have even stated their intent to increase exploration and production for at least the next five years. These are hardly decarbonisation goals. All of them intend to rely heavily on carbon offsetting to keep drilling and emitting-as-usual.
They conclude that if Carney were serious about addressing the climate crisis, he would “convene a taskforce on the managed decline of fossil fuels and bring the fossil fuel industry to the table”.
It’s not controversial to point out that offsetting does not reduce emissions (and therefore does not help address the climate crisis). Even proponents of offsetting will, if pushed, admit this fact:
In a press release about the statement signed by more than 170 organisations, Jim Walsh of Food & Water Watch says,
“Offsets are nothing short of a scam that corporate interests push, allowing them to continue polluting our climate and frontline communities with impunity. The harm does not end there, as these offset schemes displace indigenous communities and prop-up corporate agriculture and factory farming. Addressing the climate crisis means keeping fossil fuels in the ground, rather than pursuing these scams that harm our communities and climate for nothing other than corporate profits.”
Here is the statement, “Offsets don’t stop climate climate change”. The list of signatories is available here:
Offsets don’t stop climate changeClimate-driven wildfires, flooding, droughts and other extreme weather events daily impact every corner of the globe.Yet the fossil fuel industry, big utilities, big agriculture, big finance — and their political allies — are pushing carbon offset schemes to allow them to continue releasing the greenhouse gases driving the climate crisis, harming Indigenous, Black, and other already-marginalized communities, and undermining sustainable farming and forestry practices.The science is clear: we need to rapidly phase out fossil fuels and emissions-intensive agricultural practices like factory farming, while protecting forests, wetlands, and other natural carbon sinks. Every delay means greater impacts on our climate and more pollution in historically overburdened communities.[1]We call on leaders around the world to join us in rejecting offset schemes because these pay-to-pollute practices are nothing more than false and harmful solutions to the climate crisis.
- Nature-based offsets cannot “offset” fossil fuel combustion. While fossil fuel companies and other polluters would like fossil carbon and biological carbon to be fully interchangeable, this has no scientific basis.[2] Fossil carbon emissions are effectively permanent, coming from reservoirs deep in the earth where they have been stored for millions of years. When burned, the carbon pollution remains in the atmosphere for hundreds to thousands of years. In contrast, crops, soils, oceans, and forests are “fast-exchange” carbon reservoirs that have limited carbon storage capacity and can re-release carbon back into the atmosphere over the course of a few decades, or sometimes even over a few days.[3] Offsets confuse this basic science by wrongly treating the Earth’s biosphere as an endless source of potential storage for fossil carbon emissions.
- Offsets of any kind perpetuate environmental injustice. Greenhouse gas emitting industries are disproportionately sited in poor communities and communities of color, causing them to bear the brunt of pollution. Offset schemes increase pollution in these communities, worsening environmental injustice.[4] Furthermore, by allowing pollution to continue in exchange for land grabs elsewhere, offsets often shift the burden of reducing emissions from the Global North to the Global South.[5]
- The use of offsets is likely to increase greenhouse gas emissions. Polluters frequently purchase offsets for emissions-reducing practices by one entity, so that their own emissions can continue. In this case, emissions are still added to the atmosphere, so global warming continues. Polluters also purchase offsets for practices that could pull carbon out of the atmosphere, such as by planting forests or protecting existing forests. However, carbon storage in natural ecosystems is inherently temporary and highly reversible, as has been seen so clearly in the tragic forest fires in the U.S. west in the past few years.[6] All that carbon can be released very quickly back into the atmosphere, again increasing emissions.
- Offsets can result in violations of the rights of Indigenous and tribal peoples. Satisfying market demands for offsets will require access to huge expanses of land and forest, lands already occupied by Indigenous Peoples, peasants, and local communities. As such, Indigenous lands are increasingly targeted by forest offset project developers, creating pressure and division in Indigenous communities.[7]
- Offsets undermine sustainable farming and increase consolidation in agriculture. Carbon offset programs give additional leverage to already powerful corporations, including agribusinesses and factory farms, that have long squeezed farm income and drained rural economies, while increasing environmental pollution.[8] Corporations and large landowners are best-positioned to develop offset projects, which further entrenches the factory farm and corn/soybean monocultural model at the expense of small farmers, including Black and Indigenous farmers and Tribal Nations. Instead of allowing the industrial, extractive model of agriculture to further prosper by selling offsets to industrial polluters, policy makers should support traditional and ecologically regenerative agricultural practices.
- Offsets markets create more conditions for fraud and gambling than for climate action. Existing offset schemes have already proven to be easily open to fraud.[9] Yet the speculative trading of offsets derivatives and other financial products has already begun, prioritizing profit-seeking traders and speculators over economic and climate justice.[10]
We call on global policy makers to reject offset schemes and embrace real climate solutions that will keep fossil fuels in the ground, support sustainable food systems, and end deforestation, while eliminating pollution in frontline communities.
[1] IPCC, Global Warming of 1.5°C. International Energy Agency, Net Zero by 2050. IPCC, AR6 Climate Change 2021.
[2] Carton et al. “Undoing Equivalence: Rethinking Carbon Accounting for Just Carbon Removal,” Frontiers in Climate, 16 April 2021.
[3] Anderegg, W. et al., Climate-driven risks to the climate mitigation potential of forests, Science 368 (6947) 2020. Mackey, B. et al. 2013., “Untangling the confusion around land carbon science and climate change mitigation policy,” Nature Climate Change, 3(6),pp.552-557, 2013.
[4] Food & Water Watch, “Cap and trade: More pollution for the poor and people of color,” November 2019 at 1 to 2.
[5] Gilbertson, Tamara, Carbon Pricing: A Critical Perspective for Community Resistance, Indigenous Environment Network and Climate Justice Alliance, 2017.[6] Anderegg, W., “Gambling with the climate: how risky of a bet are natural climate solutions?,” AGU Advances, 2021. Coffield, S.R. et al., “Climate-driven limits to future carbon storage in California’s wildland ecosystems,” AGU Advances, 2021.
[7] Ahmend, N., “World Bank and UN carbon offset scheme ‘complicit in genocidal land grabs – NGOs,” The Guardian, 3 July 2014. Forest Peoples Programme, The Reality of REDD in Peru: Between Theory and Practice, November 2011.
[8] Institute for Agriculture and Trade Policy, “Why carbon markets won’t work for agriculture,” January 2020 at 2.
[9] Elgin, B., “A Top U.S. Seller of Carbon Offsets Starts Investigating Its Own Projects,” Bloomberg. 5 April 2021.
[10] Hache, F., Shades of Green: The Rise of Natural Capital Markets and Sustainable Finance, Green Finance Observatory, March 2019.
Original Source: Redd-monitor.
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SPECIAL REPORTS AND PROJECTS
How Carbon Markets are Exploiting Marginalised Communities in the Global South Instead of Uplifting them
The billion-dollar fiction of carbon offsets
Carbon markets are turning indigenous farming practices into corporate profit, leaving communities empty-handed.
For Janni Mithula, 42, a resident of the Thotavalasa village in Andhra Pradesh, cultivating the rich, red soil of the valley was her livelihood. On her small patch of land grow with coffee and mango trees, planted over decades with tireless care and ancestral knowledge. Yet, once a source of pride and sustainability, the meaning of these trees has been quietly redefined in ways she never agreed to.
Over a decade ago, more than 333 villages in the valley began receiving free saplings from the Naandi Foundation as part of a large-scale afforestation initiative funded by a French entity, Livelihoods Funds. Unbeknownst to Janni and her neighbours, these trees had transfigured into commodities in a global carbon market, their branches reaching far beyond the valley to corporate boardrooms, their roots tethered not to the soil of sustenance but to the ledger of profit and carbon offsets.
The project claims that it would offset nearly 1.6 million tonnes of carbon dioxide equivalent over two decades. On paper, it is a triumph for global climate efforts. In reality, the residents’ lives have seen little improvement. While the sale of carbon credits has reportedly fetched millions of dollars for developers, Janni’s rewards have been minimal: a few saplings, occasional training sessions, and the obligation to care for trees that she no longer fully owns. These invisible transactions pose a grave risk to marginalised communities, who practice sustainable agriculture out of necessity rather than trend.
Also Read | COP29: The $300 billion climate finance deal is an optical illusion
The very systems that could uplift them—carbon markets intended to fund sustainability—end up exploiting their resources without addressing their needs.
Earlier this year, the Centre for Science and Environment (CSE) and Down To Earth (DTE) released a joint investigative report on the functioning of the voluntary carbon market in India. The report critically analysed the impacts of the new-age climate solution, its efficacy in reducing carbon emissions, and how it affected the communities involved in the schemes.
The findings highlighted systemic opacity, with key details about the projects, prices, and beneficiaries concealed under confidentiality clauses. Developers also tended to overestimate their emission reductions while failing to provide local communities with meaningful compensation. The report stated that the main beneficiaries of these projects were the project developers, auditors and companies that make a profit out of the carbon trading system.
Carbon markets: The evolution
On December 11, 1997, the parties to the United Nations Framework Convention on Climate Change (UNFCC) convened and adopted the Kyoto Protocol with the exigence of the climate crisis bearing down on the world. The Kyoto Protocol, revered for its epochal impact on global climate policy, focused on controlling the emissions of prime anthropogenic greenhouse gases (GHGs). One of the key mechanisms introduced was the “Clean Development Mechanism”, which would allow developed countries to invest in emission reduction projects in developing countries. In exchange, the developed countries would receive certified emission reduction (CER) credits, or carbon credits as they are commonly known.
One carbon credit represents the reduction or removal of one tonne of CO2. Governments create and enforce rules for carbon markets by setting emission caps and monitoring compliance with the help of third-party organisations. For example, the European Union Emissions Trading System (EU-ETS) sets an overall cap on emissions and allocates allowances to industries. A financial penalty system was also put in place to prevent verifiers and consultants from falsifying emissions data. The impact of these renewable projects is usually verified through methods such as satellite imagery or on-site audits.
Companies such as Verra and Gold Standard have seized this opportunity, leading the designing and monitoring of carbon removal projects. Governments and corporations invest in these projects to meet their own net-zero pledges. The companies then issue carbon credits to the investing entity. Verra has stated that they have issued over 1 billion carbon credits, translating into the reduction of 1 billion tonnes of greenhouse gas emissions. However, countless case studies and reports have indicated that only a small fraction of these funds reach the local communities practising sustainability.
Article 6 under the Paris Agreement further concretised and regulated the crediting mechanism to enable countries interested in setting up carbon trading schemes. However, the parties failed to reach a consensus regarding the specifics of Article 6 at COP 27 and COP 28. So, climate finance experts and policymakers were very interested in the developments taking place at the COP 29 summit in Baku, Azerbaijan. Unlike its predecessors, the COP 29 summit has seen a diminished attendee list, with major Western political leaders including Joe Biden, Ursula von der Leyen, Olaf Scholz, and Emmanuel Macron failing to make it to the summit due to the increasingly turbulent climate within their own constituencies.
From a post-colonial perspective, carbon markets have been viewed as perpetuating existing global hierarchies; wealthier countries and corporations fail to reduce their emissions and instead shift the burden of mitigation onto developing nations. | Photo Credit: Illustration by Irfan Khan
Sceptics questioned whether this iteration of the summit would lead to any substantial decisions being passed. However, on day-two of the summit, parties reached a landmark consensus on the standards for Article 6.4 and a dynamic mechanism to update them. Mukhtar Babayev, the Minister of Ecology and Natural Resources of Azerbaijan and the COP 29 President, said: “By matching buyers and sellers efficiently, such markets could reduce the cost of implementing Nationally Determined Contributions by 250 billion dollars a year.” He added that cross-border cooperation and compromise would be vital in fighting climate change.
India has positioned itself as an advocate for the Like-Minded Developing Countries (LMDCs) group, with Naresh Pal Gangwar, India’s lead negotiator at COP 29, saying, “We are at a crucial juncture in our fight against climate change. What we decide here will enable all of us, particularly those in the Global South, to not only take ambitious mitigation action but also adapt to climate change.”
The COP 29 decision comes in light of the Indian government’s adoption of the amended Energy Conservation Act of 2022, which enabled India to set up its own carbon market. In July 2024, the Bureau of Energy Efficiency (BEE), an agency under the Ministry of Power, released a detailed report containing the rules and regulations of the Carbon Credit Trading Scheme (CCTS), India’s ambitious plan for a compliance-based carbon market. The BEE has aimed to launch India’s carbon market in 2026.
CSE’s report highlighted the challenges and possible strategies that the Indian carbon market could adopt from other carbon markets around the world. Referring to this report, Parth Kumar, a programme manager at CSE, pointed out how low carbon prices and low market liquidity would be prominent challenges that the nascent Indian market would have to tackle.
The Global South should be concerned
Following the landmark Article 6.4 decision, climate activists called out the supervisory board for the lack of discussion in the decision-making process. “Kicking off COP29 with a backdoor deal on Article 6.4 sets a poor precedent for transparency and proper governance,” said Isa Mulder, a climate finance expert at Carbon Market Watch. The hastily passed decision reflects the pressure that host countries seem to face; a monumental decision must be passed for a COP summit to be touted as a success.
The science behind carbon markets is rooted in the ability of forests, soil, and oceans to act as carbon sinks by capturing atmospheric carbon dioxide. This process is known as carbon sequestration, and it is central to afforestation and soil health restoration projects. However, the long-term efficacy and scalability of these projects have been repeatedly questioned. The normative understanding of carbon markets as a tool to mitigate climate change has also come under scrutiny recently, with many activists calling the market-driven approach disingenuous to the goals of the climate movement.
From a post-colonial perspective, carbon markets have been viewed as perpetuating existing global hierarchies; wealthier countries and corporations fail to reduce their emissions and instead shift the burden of mitigation onto developing nations. Olúfẹ́mi O. Táíwò, Professor of Philosophy at Georgetown University, said, “Climate colonialism is the deepening or expansion of foreign domination through climate initiatives that exploit poorer nations’ resources or otherwise compromises their sovereignty.” Moreover, the effects of climate change disproportionately fall on the shoulders of marginalised communities in the Global South, even though industrialised nations historically produce the bulk of emissions.
There have also been doubts surrounding the claiming process of carbon credits and whether the buyer country or the country where the project is set can count the project towards its own Nationally Determined Contributions (NDCs). Provisions under Article 6 of the Paris Agreement state that countries cannot use any emission reductions sold to another company or country towards their own emissions targets. However, this has become a widespread issue plaguing carbon markets. The EU has recently been criticised for counting carbon credits sold to corporations under the Carbon Removal Certification Framework (CRCF) towards the EU’s own NDC targets. This has led to concerns over the overestimation of the impact of mission reduction projects.
Also Read | India needs climate justice, not just targets
Carbon offset projects, additionally, alienate local communities from their land as the idea of ownership and stewardship becomes muddled with corporate plans on optimally utilising the land for these projects. For example, in 2014, Green Resources, a Norwegian company, leased more than 10,000 hectares of land in Uganda, with additional land being leased in Mozambique and Tanzania. This land was used as a part of afforestation projects to practise sustainability and alleviate poverty in the area. However, interviews conducted with local Ugandan villagers revealed that the project forcibly evicted the local population without delivering its promises to improve access to health and education for the community. These concerns highlighted how the burden of adopting sustainable practices is placed on marginalised communities.
While carbon markets are rightfully criticised, they remain a key piece of the global climate adaptation puzzle. Addressing the issues surrounding transparency and equitable benefit-sharing with local communities could lead to carbon markets having a positive impact on climate change. The system must ensure that larger corporations and countries do not merely export their emissions, but instead implement measures to reduce their own emissions over time. It is also imperative to explore other innovative strategies such as circular economy approaches and nature-based solutions that are more localised, offering hope for a just and sustainable future.
Adithya Santhosh Kumar is currently pursuing a Master’s in Engineering and Policy Analysis at the Delft University of Technology in the Netherlands.
Source: frontline.thehindu.com
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- a majority stake in Unifrutti, with 15,000 ha of fruit farms in Chile, Ecuador, Argentina, Philippines, Spain, Italy and South Africa; and
- Al Dahra, a large agribusiness conglomerate controlling and cultivating 118,315 ha of farmland in Romania, Spain, Serbia, Morocco, Egypt, Namibia and the US.
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Sovereign wealth funds invested in farmland/food/agriculture (2023)
|
|||
|
Country
|
Fund
|
Est.
|
AUM (US$bn)
|
|
China
|
CIC
|
2007
|
1351
|
|
Norway
|
NBIM
|
1997
|
1145
|
|
UAE – Abu Dhabi
|
ADIA
|
1967
|
993
|
|
Kuwait
|
KIA
|
1953
|
769
|
|
Saudi Arabia
|
PIF
|
1971
|
620
|
|
China
|
NSSF
|
2000
|
474
|
|
Qatar
|
QIA
|
2005
|
450
|
|
UAE – Dubai
|
ICD
|
2006
|
300
|
|
Singapore
|
Temasek
|
1974
|
298
|
|
UAE – Abu Dhabi
|
Mubadala
|
2002
|
284
|
|
UAE – Abu Dhabi
|
ADQ
|
2018
|
157
|
|
Australia
|
Future Fund
|
2006
|
157
|
|
Iran
|
NDFI
|
2011
|
139
|
|
UAE
|
EIA
|
2007
|
91
|
|
USA – AK
|
Alaska PFC
|
1976
|
73
|
|
Australia – QLD
|
QIC
|
1991
|
67
|
|
USA – TX
|
UTIMCO
|
1876
|
64
|
|
USA – TX
|
Texas PSF
|
1854
|
56
|
|
Brunei
|
BIA
|
1983
|
55
|
|
France
|
Bpifrance
|
2008
|
50
|
|
UAE – Dubai
|
Dubai World
|
2005
|
42
|
|
Oman
|
OIA
|
2020
|
42
|
|
USA – NM
|
New Mexico SIC
|
1958
|
37
|
|
Malaysia
|
Khazanah
|
1993
|
31
|
|
Russia
|
RDIF
|
2011
|
28
|
|
Turkey
|
TVF
|
2017
|
22
|
|
Bahrain
|
Mumtalakat
|
2006
|
19
|
|
Ireland
|
ISIF
|
2014
|
16
|
|
Canada – SK
|
SK CIC
|
1947
|
16
|
|
Italy
|
CDP Equity
|
2011
|
13
|
|
China
|
CADF
|
2007
|
10
|
|
Indonesia
|
INA
|
2020
|
6
|
|
India
|
NIIF
|
2015
|
4
|
|
Spain
|
COFIDES
|
1988
|
4
|
|
Nigeria
|
NSIA
|
2011
|
3
|
|
Angola
|
FSDEA
|
2012
|
3
|
|
Egypt
|
TSFE
|
2018
|
2
|
|
Vietnam
|
SCIC
|
2006
|
2
|
|
Gabon
|
FGIS
|
2012
|
2
|
|
Morocco
|
Ithmar Capital
|
2011
|
2
|
|
Palestine
|
PIF
|
2003
|
1
|
|
Bolivia
|
FINPRO
|
2015
|
0,4
|
|
AUM (assets under management) figures from Global SWF, January 2023
|
|||
|
Engagement in food/farmland/agriculture assessed by GRAIN
|
|||
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