Nearly one billion carbon offset credits have been voluntarily purchased over the past decade, from which conservation and clean energy projects have netted nearly $4.5 billion, according to a recent Washington DC-based report by conservation group Forest Trends.
Voluntary carbon markets provide companies, governments, and anyone else looking to offset their greenhouse gas emissions the opportunity to purchase carbon offsets.
A carbon offset credit represents one ton of carbon dioxide emissions, or the equivalent of another greenhouse gas, conserved through actions such as preserving endangered rainforests, increasing energy efficiency, or installing clean energy systems.
In contrast, in so-called “official markets,” such as those in the European Union’s Emissions Trading Scheme, carbon credits are purchased to reduce emissions that are mandated by the government.
In 2014, carbon offsets equivalent to about 87 million metric tons of CO2 were purchased voluntarily, a 14 percent increase over the previous year, the report states.
According to Kelley Hamrick of Forest Trend, the lead author of the report which is titled Beyond the Curve: State of the 2015 Voluntary Carbon Markets,
some $4.5 billion spent on voluntary carbon credits over the past ten years has had a far greater impact than the relatively small amount of money would suggest.
“Many of the rules and processes now commonplace in official emerging markets around the world (valued at around $30 billion in 2014 alone, according to the World Bank) have been tested and refined in voluntary markets,” Hamrick said via email. to mongabay.com.
In other words, governments looking to create their regulated carbon markets are doing so with far less risk because voluntary markets have already tested offset designs and methodologies, which Hamrick and his team found.
They write in the report that voluntary markets provide a “fertile testing ground for the concept of ‘payments for performance’ because private buyers typically only pay if emission reductions are verified against a predetermined standard.”
Hamrick told mongabay.com that when carbon offsets first appeared, there was criticism about the verifiability of estimated emission reductions,
especially about what could be guaranteed in the emissions created, or in the forest in question that could be destroyed without the additional investment. This led to the third-party verification standards that now guide almost all carbon development projects, she says.
For example, many of the methodological projects and market frameworks that the carbon pricing regime established by the California Emissions and Trading Program were tested for the first time in voluntary markets, the report finds.
Methodologies for developing projects that prevent deforestation, distributing clean stoves in developing countries, and growing rice with a lower carbon footprint were all “tested and perfected by volunteer agents,” according to the report.
Hamrick said work funded by volunteers buying carbon credits has had far-reaching repercussions, such as enabling conservation activities to reduce deforestation on a scale from individual projects to regional and national programs, which is further evidence of the huge impact of small voluntary markets. of carbons.
Other types of projects can have a big impact even if they are done on a much smaller scale. “This work has also allowed us to reduce,
on the ground, offset projects, such as switching to cleaner burning stoves, to utilize carbon finance in a way that these projects are financially viable,” added Hamrick.
Gloria Gonzalez of Forest Trend, who contributed to the report, told mongabay.com via email that in recent years, buyers have become more interested in projects with additional benefits beyond slow climate change.
These are also known as co-benefits, factors such as improving the health and empowerment of women in developing countries.
The report tracks nearly 20 different types of projects, including forestry and land use, renewable energy, efficiency, and household appliances projects such as stoves and water filtration systems.
“Out of the top seven types of projects monitored over the last decade, three are related to forestry (avoiding deforestation, planting trees, and forest management) and the projects are highly valued for their social, health, and other benefits. environmental benefits” said, Gonzalez.
“Another project type, clean stove distribution, trade the sixth highest volume of all project types, although we only started tracking them as a separate category in 2012”
Forestry offsets and land use projects accounted for more than half of all voluntary transactions in 2014, led by projects to prevent deforestation that saved the equivalent of 25 million metric tons of CO2 from being released. Renewable energy projects were also popular last year – wind offsets accounted for the equivalent of 13.7 million metric tons of CO2.
Carbon credits can be part of the solution, but they are not a panacea. A billion metric tons of CO2 emissions could have been avoided by purchasing offset credits over the last decade, but the world was projected to release approximately 40 times that amount – 40 billion metric tons – in just 2014.