by DUBAI, United Arab Emirates (AP) — A major, far-reaching effort is underway to mobilize money to save Planet Earth.
Climate finance experts say trillions of dollars are needed for forestry projects and renewable energy such as solar and wind in the developing world, all aimed at reducing pollution from burning oil, gas and coal, which causes climate change.
The price tag is staggering: Investment in energy transition technologies was $1.3 trillion last year, according to the International Renewable Energy Agency, an intergovernmental group, and that figure must at least quadruple to avoid a level of warming that , according to scientists, would be higher. catastrophic.
Even wealthy governments cannot commit that amount of money and often have difficulty getting even modest amounts approved by their respective congresses and parliaments.
Enter a plan to combine the cash-generating power of the private sector with carbon credits, a hot topic of discussion at the annual climate talks taking place in Dubai.
“It’s a huge amount of capital to raise in a short time, so governments are going to have to be creative about how to get there,” said Yousef Alhorr, founding president of the Global Carbon Council, an international credit organization. carbon and sustainability. development program based in oil-rich Qatar.
Carbon markets already exist and come with a lot of baggage, which is why the plan has many detractors. Critics of the plan being developed say existing voluntary programs have been poorly monitored, leading to cheating and rights abuses.
Proponents such as US climate envoy John Kerry, lenders such as the World Bank and the UN recognize that markets have room for improvement. They say their plan would improve tracking and provide greater cash turnover.
These voluntary schemes would resemble carbon offsets like those long offered by airlines to travelers, who voluntarily pay an additional fee to offset the carbon generated by their flights, often to fund tree-planting or conservation projects. existing forests.
The markets would work like this: Participating countries could generate carbon credits based on projects aimed at meeting their own climate goals, such as protecting existing forests from development or closing coal-fired plants.
Private sector actors could then purchase the credits, allowing them to emit a certain amount of carbon dioxide or other greenhouse gases. Highly polluting companies would be important clients.
Each credit would be equivalent to one ton of CO2 or other equivalent greenhouse gases that can be reduced in the air, sequestered or avoided using green energy.
The money from the credits generated would be allocated to local projects. The price per ton of carbon would fluctuate in the market, meaning the more it rises, the more green projects could earn through new credits generated.
In Dubai, the US government, together with the Bezos Earth Fund and the Rockefeller Foundation, announced a project called the “Energy Transition Accelerator.” It aims to guide the plan by using “high integrity” carbon credits to eliminate potential pitfalls and support local communities and populations.
Until now, responsibility has largely fallen on registries independent of carbon markets. The ETA plan would give governments a greater role in ensuring safeguards are built in.
Chile, the Dominican Republic and Nigeria are pilot countries for ETA, which aims to be established before Earth Day in April. Advocates estimate that between $72 billion and $207 billion could be mobilized to transition to clean energy projects by 2035.
It is a voluntary program and companies such as Bank of America, Mastercard, Morgan Stanley and PepsiCo have signed a letter of interest in participating.
In the past, companies participating in other carbon markets have made false claims about projects, known as greenwashing, and some financiers, farmers and others count a single project multiple times, meaning the benefits are overstated. . Some corporate cheats have increased emissions only to then reduce them and claim credit for becoming greener.
Critics say carbon credit programs allow polluters to continue polluting and have diverted attention from the most important goal: ending the use of fossil fuels, which is the number one cause of global warming.
“Buying offsets from carbon markets without phasing out fossil fuels will always be greenwashing,” said Erika Lennon, senior climate and energy attorney at the Center for International Environmental Law.
Kerry admitted that “some people abuse” carbon credit systems and “have done an injustice to everyone.
“We believe it is more than curated with the approaches we have put together,” he said during a Dec. 4 panel at COP28, where he detailed the Energy Transition Accelerator.
Simon Steill, executive director of the United Nations Framework Convention on Climate Change, warned against over-reliance on such programs. He said they “cannot substitute government action” and should be accompanied by “robust domestic emissions cuts by the private sector.”
He called for new projects in agriculture, energy storage, asset retirement from fossil fuels, green hydrogen extracted through renewable energy and electric mobility.
Still, it’s hard to imagine governments footing the bill for the large-scale energy transition.
Ajay Banja, president of the World Bank, said there is a need to unify a fragmented market to create greater scale. The Washington-based multilateral bank has devised its own carbon credit program, the Forest Carbon Partnership Facility.
In it, several countries, including Guatemala, Vietnam and the Congo, plan to issue the first 24 million credits over the next year, and 11 other countries are lining up to join. The bank says the project hopes to raise up to $2.5 billion through 2028.
“Ultimately, these credits have the potential to transfer billions of dollars to communities from companies and governments, on a voluntary basis,” Banja said on the panel.
“This is difficult and we will be criticized: I am quite sure of that. We will make mistakes: I am quite sure of that,” he added. “But we will learn from them.”
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AP writers Seth Borenstein and Sibi Arasu contributed to this report.
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