West African nations call for firms to be able to offset carbon

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FILE PHOTO: A general view shows Tata Steel Port Talbot steel production plant, ahead of its planned transition from blast furnace to electric arc furnaces, at Port Talbot, Wales, Britain, March 11, 2024. REUTERS/Toby Melville/File Photo

LONDON, June 5 (Reuters) – A group of 10 West African countries has weighed into a debate over whether companies around the world should be allowed to use carbon offsets to cut emissions, arguing they are critical to attracting financing for climate and conservation efforts.

While some scientists and technical advisers have criticised offsets as undermining efforts to rein in climate change by permitting continued greenhouse gas emissions, others see them as a necessary tool to boost crucial finance.

In a letter to the Science-Based Targets initiative (SBTi), the world’s top corporate climate-target verifier, the 10 countries called on its trustees to ensure offsetting is included within net-zero guidance to companies.

The letter, signed by Burkina Faso, Cape Verde, Ivory Coast, Gambia, Guinea-Bissau, Guinea, Liberia, Mali, Senegal and Togo, said recent reports questioning the validity of offsetting emissions were the work of “misguided activists”.

There is growing debate over the ethics and efficacy of offsets, also called carbon credits, to excuse some corporate emissions. Offsets are generated by investing in projects that lower or prevent carbon emissions and can be traded.

On Wednesday, U.N. Secretary-General Antonio Guterres weighed into the fray, warning about “dubious carbon offsets that erode public trust while doing little or nothing to help the climate.”

“We need high integrity carbon markets that are credible and with rules consistent with limiting warming to 1.5 degrees. I also encourage scientists and engineers to focus urgently on carbon dioxide removal and storage – to deal safely and sustainably with final emissions from the heavy industries hardest to clean.”

The letter’s main author told Reuters that the lack of certainty in the SBTi’s guidance was damaging corporate confidence and slowing financing.

“The SBTi is, rightly or wrongly, the gatekeeper that can unlock finance from corporations around the world that wish to contribute to climate action … at the same time as (and not instead of) taking action to decarbonise their valuation,” said Ousmane Fall Sarr, coordinator of the West African Alliance on Carbon Markets and Climate Finance.

The SBTi’s current guidance only allows very limited use of renewable energy certificates which a company can use to reduce so-called Scope 2 emissions, those related directly to the energy it uses.

But SBTi’s board of trustees said on April 9 that, subject to certain rules and guidance, it would allow them for Scope 3 emissions, those associated with their supply chains, distribution and product use. This was welcomed by both companies and developing countries that are relying on carbon offset projects to generate cash.

Uncertainty remained, however, because the board had not followed SBTi’s normal procedure for policy-setting. SBTi has said it is reviewing the scientific research and debating the issue before making a final call.

In a statement to Reuters, it said it welcomed feedback from all stakeholders, and would open a public consultation once its research was complete.

‘NO ALTERNATIVE’

The SBTi, formed by a coalition of non-profit organisations, is seen as a key player in global efforts to scale up the market for voluntary carbon credits by addressing quality concerns and ensuring they deliver the benefits they claim.

The United States added momentum on May 28 by unveiling its own guidelines for voluntary carbon credits.

In their May 24 letter, the West African countries reminded the SBTi board of its pledge in April, which is still on its website. “To us, carbon markets is climate finance,” the letter said. “There is no alternative. We are at a pivotal moment.”

With climate financing still far below needed levels, the letter said offset revenues were crucial to supporting poor communities, encouraging conservation, making the transition to clean energy and adapting to the conditions of a warmer world.

The OECD has said poor nations’ actual climate investment needs could total $1 trillion per year by 2025.

Ousmane said the lack of clarity on offsets would also hold up country efforts to calculate and update their national climate plans ahead of the COP29 United Nations climate summit in November in Baku, Azerbaijan.

Countries must update these “nationally determined contributions” before next year’s COP30 summit in Brazil, but are being encouraged to submit them this year.

Source: https://www.cnbcafrica.com/2024/west-african-nations-call-for-firms-to-be-able-to-offset-carbon/  (Reporting by Virginia Furness in London; Editing by Katy Daigle, Simon Jessop, Alexander Smith and Rod Nickel)

 

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