COP27: US launches plan for carbon offsetting, move raises serious concerns among climate experts

SHAM EL-SHEIKH: The US here on Wednesday announced a new voluntary carbon market offset initiative to finance the decommissioning of coal and accelerate clean energy transition in developing countries even as the move raised concerns among experts who believed that the American proposal is no substitute for the real public finance that these countries need.
"This initiative, the Energy Transition Accelerator (ETA), will catalyze private capital to accelerate the energy transition in developing countries, supporting the rapid deployment of renewables and delivering deeper and earlier emissions reductions," said the US presidential climate envoy, John Kerry, while jointly announce the plan with two philanthropies - The Rockefeller Foundation and the Bezos Earth Fund - on the sidelines of the UN climate talks (COP27).
Noting that it would be a new public-private effort to unlock finance, Kerry said, "Our intention is to put the carbon market to work to deploy capital to speed the transition from dirty to clean power, specifically for two purposes - to retire unabated coal fired power and accelerate renewables."
According to the plan, one idea for the ETA will be to open it only to companies committed to achieving net zero no later than 2050 and science-based interim targets to promote environmental integrity in the use of carbon credits.
“Other provisions will establish strong transparency requirements and address how companies’ investments in verified emissions reductions through the ETA could be recognized," said the US state department in a statement.
Explaining it further, it said the companies, for instance, could use credits to support mitigation above and beyond their interim targets, to contribute to climate finance or other voluntary goals, or to contribute to a host country’s NDC (climate action plan) achievement.
Explanations and caveats have, however, not cut ice with experts. “Carbon offsets are not an answer in a world already on fire, underwater and facing mounting climate losses and damage. While the exact details are still unclear, the outlines of the US proposal are out of step with the science, which calls for steep, absolute emission reductions as soon as possible if we are to have any chance of meeting the goals of the Paris Agreement,” said Rachel Cleetus, policy director and lead economist for the climate and energy programme at Union of Concerned Scientists (UCS).
Cleetus said, “The private sector can and must play an important role in tackling the climate crisis. However, a voluntary carbon credit programme won’t guarantee deep, real cuts in emissions—it’s tantamount to rearranging the deck chairs as the climate ship is going down.”
She argued that the low- and middle-income countries need grants-based public finance from richer countries to help them quickly transition away from fossil fuels, and that's what the US must deliver, rather than questionable carbon offset schemes that risk allowing companies to pollute at the expense of the planet.
Experts from India too have similar concerns. “What developing countries need is predictable finance - not offset markets. The proposed initiative cannot make up for the United States’ failure to provide its fair share of climate finance - an estimated $40 billion of the unmet goal of $100 billion a year. It also should not substitute for deep decarbonization needed within the US and other industrialized countries,” said Ulka Kelkar, director, climate change programme, World Resources Institute (India).
She said, “For developing countries like India, who have been raising their climate ambition, the first priority would be to meet their own targets and not provide offsets for reductions in developed nations."