The end of carbon offsets?  Another giant retreats from them

Another big company is withdrawing from carbon offset programs. Shell has canceled plans to fund projects to offset greenhouse gas emissions amid concerns that many of them have no real impact on the environment. Earlier, similar decisions were taken by, among others: Nestlé and Gucci.

The oil company in June abandoned a goal of investing up to $100 million annually in carbon credit programs and $120 million annually. In natural compensation programs. The move comes after the Carbon Trust, one of the leading environmental certification programs, stopped awarding “carbon neutrality” certificates to companies that sought to achieve this goal by relying on offsets. The Trust acknowledged that the label may be misleading to consumers due to the poor quality of many compensation schemes.

Eco-offset programs provide companies with a way to achieve climate neutrality by funding projects that aim to contribute to removing carbon dioxide from the atmosphere. These include protecting and replanting forests and programs to expand underwater kelp meadows. By financing such projects, companies can subtract the amount of CO2 declared by their originator from their emissions, so they do not actually have to reduce the amount of greenhouse gases they produce.

However, numerous journalistic investigations have shown that the overwhelming number of emissions offset programs do nothing to reduce global warming. Many of the programs reviewed by experts were rated as “worthless.” The offset market is not subject to global regulations that would impose specific standards and success indicators on projects.

The entire industry seems to be in crisis. Barclays estimates that the market for voluntary emissions allowances, which was worth $2 billion in 2021, is now worth just $500 million. However, the bank’s forecasts indicate that in the coming years it may recover significantly and reach tens of billions in global value.

Despite the criticism that many carbon offset programs face, the market overall has strong political support. At the African Climate Summit held last week in Nairobi, leaders stressed Africa’s desire to benefit as much as possible from the growing emissions offset market.

The African Carbon Markets Initiative’s goal is to generate 300 million carbon credits annually by 2030 and generate annual revenues of $6 billion. At the Kenya summit, the UAE pledged to purchase $450 million in carbon credits from Africa.

However, these announcements were met with criticism and concerns from African environmental activists. During the summit, protests broke out, with participants accusing program organizers of not helping local communities and not keeping environmental promises.

“Instead of providing real public financing for renewables and adaptation strategies in Africa, rich countries have pledged money to support carbon markets that have never worked in Africa or anywhere else,” Mohammed Addo, director of the Power Center for Climate Research, told Guardian Shift Africa. “They are wasting money that should be spent on real solutions.”

Shell itself confirms that it is not completely abandoning the concept of offsetting its emissions using carbon credits. “The carbon market may not work perfectly everywhere yet, but discussions are ongoing on how to improve it, which we welcome,” a company spokesperson said in an email.

Likewise, US climate envoy John Kerry emphasized in Nairobi that the solution to the problem lies in creating real oversight of projects promising climate benefits.

“This market must become a billion-dollar market to operate effectively,” Kerry said. “And to do that, we must ensure the environmental integrity of this market.” “This is extremely important not only to protect the climate, but also to create a thriving market because people will not risk participating where proper standards and guidelines do not apply.”

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