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A significant, ambitious initiative is currently underway to raise funds for the preservation of Planet Earth.
According to climate finance experts, there is a pressing need for trillions of dollars to fund forestry initiatives and renewable energy sources such as solar and wind in developing countries. These efforts are aimed at reducing pollution from the burning of fossil fuels, namely oil, gas, and coal, which contribute to climate change.
The cost is staggering: According to the International Renewable Energy Agency, a governmental organization, investments in energy transition technologies reached $1.3 trillion last year. However, this amount needs to increase at least fourfold in order to prevent a level of global warming that experts deem catastrophic.
Even wealthy governments are unable to make such a large financial commitment and often face difficulties in getting approval from their respective legislative bodies for even small amounts.
Propose a strategy to merge the profit-generating abilities of private businesses with carbon credits, a popular subject being discussed at the yearly climate conference in Dubai.
“It is a significant sum of money to gather within a limited timeframe, thus governments will need to use innovative approaches to achieve this,” stated Yousef Alhorr, the original chairman of the Global Carbon Council, a program focused on carbon credits and sustainable development on a global scale, located in the oil-abundant country of Qatar.
There are already existing carbon markets that have faced scrutiny, causing many to oppose the current plan. Those against the plan claim that previous voluntary programs have had inadequate oversight, resulting in fraudulent behavior and human rights violations.
Supporters, such as U.S. Climate Envoy John Kerry, financial institutions like the World Bank, and the United Nations, recognize that there is room for improvement in the markets. They assert that their proposal would enhance monitoring and lead to increased cash flow.
These optional programs would be similar to carbon offsets, which have been used by airlines for a long time, allowing travelers to pay an additional fee to offset the carbon emissions from their flights. This money is often used for initiatives such as planting trees or preserving current forests.
The system would function in the following way: Participating nations would earn carbon credits by completing initiatives that align with their individual climate objectives, such as preserving existing forests or decommissioning coal power plants.
The private sector could purchase credits to emit a specific quantity of carbon dioxide or other greenhouse gases. Companies with high levels of pollution would be significant buyers.
One credit would be equivalent to one ton of CO2 or other greenhouse gases that can be decreased in the atmosphere, stored, or prevented by utilizing renewable energy sources instead.
Funds generated from credits would be allocated towards local projects. The cost of carbon per ton would vary in the market, resulting in greater profits for environmentally-friendly initiatives as the price increases.
The “Energy Transition Accelerator” project was recently announced in Dubai by the U.S. government, along with the Bezos Earth Fund and the Rockefeller Foundation. Its goal is to utilize “high-integrity” carbon crediting to identify and prevent fraudulent practices, while also providing support for local communities and populations.
Previously, accountability for carbon markets has primarily been managed by independent registries. The ETA scheme proposes a greater involvement of governments in implementing safeguards.
The ETA, which plans to be implemented by Earth Day in April, has chosen Chile, Dominican Republic, and Nigeria as its initial countries. Supporters predict that a total of $72 billion to $207 billion could be raised by 2035 to fund the shift towards renewable energy projects.
The program is optional and several companies including Bank of America, Mastercard, Morgan Stanley, and PepsiCo have expressed interest in taking part by signing a letter of intent.
In previous instances, organizations involved in different carbon markets have made deceitful statements regarding their projects, known as “greenwashing.” Additionally, certain funders, farmers, and other individuals have counted one project multiple times, resulting in an overestimation of its benefits. In some cases, companies have purposely increased their emissions and then later reduced them to earn credits for being more environmentally friendly.
Critics argue that carbon credit programs allow polluters to continue emitting harmful substances and have diverted attention from the primary objective of eliminating the use of fossil fuels, which is the leading contributor to global warming.
Purchasing carbon offsets from markets without eliminating the use of fossil fuels will always be considered greenwashing, according to Erika Lennon, a senior lawyer at the Center for International Environmental Law’s Climate & Energy division.
Kerry acknowledged that there are individuals who misuse carbon credit systems, causing harm to everyone involved.
During a panel event at COP28 on Dec. 4 where he discussed the Energy Transition Accelerator, he stated that our methods have successfully surpassed the concept of simply being cured.
The executive director of the U.N. Framework Convention on Climate Change, Simon Steill, advised against overly relying on these programs. He stated that they should not replace government action and should be accompanied by strong efforts from the private sector to reduce emissions internally.
He requested the implementation of new initiatives in farming, energy storage, the phasing out of non-renewable energy sources, the production of green hydrogen using renewable resources, and the promotion of electric transportation.
However, it is difficult to envision governments covering the cost of a large-scale energy transition.
The president of the World Bank, Ajay Banja, expressed the necessity of merging a divided market in order to generate a larger scale. The multilateral bank, headquartered in Washington, has developed its own carbon credit initiative called the Forest Carbon Partnership Facility.
Several countries, such as Guatemala, Vietnam, and Congo, have announced their plans to issue 24 million credits over the next year. Additionally, 11 other countries are in the process of joining this project. According to the bank, the project aims to raise up to $2.5 billion by 2028.
During the panel discussion, Banja stated that these credits have the capacity to shift billions of dollars from corporations and governments to communities on a voluntary basis.
“We can expect criticism as this will be a challenging task. It is certain that we will make errors, but they will serve as valuable lessons for us,” he stated.
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This report was contributed to by Seth Borenstein and Sibi Arasu, journalists from AP.
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The coverage of climate and environmental issues by the Associated Press is funded by various private foundations. For more information about AP’s efforts in this area, please visit their climate initiative page. The AP bears full responsibility for all of the content they produce.
The source is independent.co.uk.
