In a ground-breaking investigation, the Centre for Science and Environment (CSE) unveils the hidden flaws of the voluntary carbon credit market, raising questions about its effectiveness in combating climate change
The Centre for Science and Environment (CSE) has shed light on severe shortcomings within the voluntary carbon credit market, a system frequently touted as an essential weapon against climate change. This revelation comes as the world anticipates discussions on carbon market regulation at the upcoming Dubai UN climate conference.
The CSE conducted an exhaustive six-month investigation, visiting 40 Indian villages and towns to scrutinise the mechanics of the carbon credit market. Surprisingly, they found that community members engaged in carbon credit-generating projects were often unaware of their roles and lacked rights over the credits they helped create.
Carbon credits are allocated to projects to reduce greenhouse gas emissions, measured in tonnes of carbon dioxide-equivalent (CO2e), and subsequently traded. This framework allows individuals and businesses to offset their emissions by acquiring credits. For example, one can opt for a carbon-neutral flight, purchase a product with an emissions offset, or demonstrate carbon neutrality in corporate activities.
However, with no official global carbon market, a voluntary carbon market has emerged, characterised by secrecy and inherent flaws. The CSE has unveiled irregularities in this voluntary market.
Sunita Narain, the director general of CSE, highlighted that the current carbon market primarily benefits project developers, auditors, and profit-seekers rather than effectively curbing emissions. In fact, it may lead to heightened global emissions, as buyers can continue emitting while claiming carbon neutrality through credit purchases.
The investigation reveals a dual issue: carbon credits are either overestimated or fail to deliver the promised environmental benefits. In a world grappling with escalating climate threats, such creative carbon accounting serves no meaningful purpose.
The global carbon market relies on two major carbon registries, Verra and Global Standard, which have registered thousands of projects worldwide and issued billions of carbon credits. India, in particular, stands as the world's second-largest carbon offset supplier, with a voluntary carbon market valued at over $1.2 billion. However, the CSE investigation indicates that this market fails to provide the intended benefits to people and the planet.
To address these issues, the CSE proposes several solutions:
1. Improve Transparency: Projects should be transparently listed, and credit prices disclosed to enhance market transparency.
2. Define Objectives: Clearly articulate the market's objectives, whether voluntary, bilateral, or multilateral and align rules accordingly.
3. Equitable Distribution: Currently, the market primarily favours project developers, consultants, and auditors, with communities receiving minimal benefits. A fair distribution of proceeds is crucial to involve communities in emission reduction efforts.
4. Streamline Processes: Simplify project designs to prevent overestimations by developers and consultants.
The CSE's investigation into the voluntary carbon credit market reveals a need for more transparency, effectiveness and fairness. Significant reforms are imperative in the carbon credit market to combat climate change and benefit people and the planet