[Op-Ed] Proposed Carbon Trading Systems Continue to Hinder Climate Change Mitigation Efforts
US Climate Envoy John Kerry at COP27. Photo: AP Newsroom / Nariman El-Mofty
On Dec. 7, the World Bank announced a global tracking system to monitor carbon trading markets and improve transparency. Following US Climate Envoy John Kerry’s recent announcement at COP27 of a carbon trading system aimed at helping developing countries transition away from fossil fuels, this new tracking system is a first step into quelling rightful criticisms that carbon trading systems typically slow down carbon mitigation efforts rather than lead to real climate solutions.
Kerry’s announcement follows Biden’s plan to quadruple climate financing by 2024, offering private capital from wealthy businesses in exchange for climate mitigation funding in vulnerable regions. This is intended to benefit companies by allowing them to meet short-term emission reduction targets, while offering funds to countries such as Chile and Nigeria to assist them in reducing emissions.
This program will operate alongside the African Carbon Markets Initiative also announced at COP-27, poised to promote a carbon crediting system that will create jobs and improve access to renewables among African countries.
Despite the increasing popularity of carbon credit markets, they are much more likely to shift money and emission guilt from one party to the next, rather than accomplish the one necessary task to truly reach future carbon goals: reduce emissions. Paying to offset carbon emissions has a long history of relieving guilt from major corporations of countries while not actually reaching carbon neutral. Credit Suisse Group AG, for example, has claimed to be carbon neutral for a decade, though this claim is supported largely by the purchases of offsets rather than an actual reduction in emissions.
Another significant critique of this announcement is its potential to distract from other promises from the US to finance climate mitigation infrastructure, focusing instead on a solution unlikely to see tangible results in helping the climate crisis. A 2009 agreement for developed countries to pledge $100 billion annually has been left largely unfulfilled, leaving vulnerable nations frustrated. Continuing to propose new, inefficient carbon mitigation strategies serves only to overwrite previous goals and promises, leaving diminishing hope for the future.
Carbon markets such as the one proposed by Kerry are also rife with the exploitation of Indigenous communities. Rich countries and companies look to Costa Rica’s resources to absolve their climate guilt and fuel carbon credit markets. While many nations in the global south have natural resources such as dense rainforests that counteract climate emissions, they are also a case study on how unethical business and governmental practices occur in carbon markets, and the importance of ethics regulations.
A rainforest near Guna Yala, Panama, where the government is working to limit deforestation and avoid carbon pollution. Photo: AP Newsroom / Arnuflo Franco
Some advocates for carbon markets argue that they allow for greater climate investments in the global south. While this may be true, these practices also strip away the autonomy of locals over the management of their own land. In addition, they make forests into commodities and only worsen the problem of deforestation and the exploitation of nature in the long run.
A Latin American negotiator at the climate summit thoroughly encapsulated the problem with this carbon trading plan by accusing the US of creating “grand schemes” and claiming to “sav[e] the world,” all while putting off tangible action to successfully mitigate the impacts of climate change.
This comes as no surprise, as the US has a record of contributing significantly less financially in proportion to its economic size. If the US wishes to hold true to its climate promises, they need to stray from grand gestures of empty promises and begin tangible efforts to reduce emissions worldwide.