US Introduces New Carbon Trading System to Boost Investment in Developing Countries | Cop27

The US government has unveiled a new voluntary carbon trading program with the aim of stimulating private investment in clean energy projects in developing countries.

John Kerry, the US climate envoy, said the new initiative, called the Energy Transition Accelerator, will be created in partnership with the Rockefeller Foundation and the Bezos Earth Fund to help provide the trillions of dollars in investment needed to help the poorest countries switch to renewable energy. and avoid disastrous climate impacts.

Nigeria and Chile are already interested in the plan, Kerry said, which could be operational from next year and will involve the buying and selling of credits that represent carbon pollution. This market, which will not be open to fossil fuel companies, is designed to support investments in renewable energy and help reduce emissions.

Annual investment in clean energy must triple to more than $4bn (£3.5bn) by 2030, according to the International Energy Agency, to avoid dangerous global warming, but Kerry said leaders in developing countries are struggling to raise enough money, which requires new methods. increase private investment.

“We have to win the battle against the climate crisis, not give in to the status quo,” Kerry said. “I did this [talking about climate change] since 1988 and I don’t know about you but I’m tired of talking about the same things – you have to break the mould. If we don’t find creative ways to raise money, we’re going to blow up 1.5 C [of global heating].”

Carbon markets have proved controversial, however, with critics pointing out that they often lead to minimal emissions reductions while enhancing the green reputation of big business. Kerry acknowledged that “mistakes of the past” had damaged the reputation of carbon markets, but promised that strong safeguards would ensure that only “high quality” credits were used. Some environmental groups, however, were not convinced.

“The private sector can and should play an important role in tackling the climate crisis,” said Rachel Cleetus, policy director at the Union of Concerned Scientists. “However, a voluntary carbon credit program will not guarantee real deep emission reductions; it’s like rearranging the deck chairs while the climate ship sinks.

African activists demand climate finance and compensation payments from rich countries to poor countries disproportionately affected by climate change and fossil fuel exploitation protest during the Cop27 climate conference on November 9, 2022 in Egypt.
African activists are calling for climate finance and compensation from rich countries to poor countries disproportionately affected by climate change and fossil fuel exploitation at the Cop27 climate conference on Wednesday in Egypt. Photography: Sean Gallup/Getty Images

“What planet does this government live on?” said Rachel Rose Jackson, director of climate research and policy at Corporate Accountability. “Apparently not planet Earth. Here on the ground at Cop27, people are talking about urgency and lives at stake. And somehow the United States thinks it’s appropriate to zoom in on something that doesn’t couldn’t be further from climate finance or real action. It’s quite the opposite. »

The United States has always been a leading proponent of carbon markets and succeeded in putting the controversial and unproven industry at the center of the Paris agreement – ​​a move which critics say has significantly weakened the carbon market. ‘OK.

The most common criticism of carbon offsetting is that it is just an “accounting scam” – a bogus solution that allows polluters to continue polluting instead of reducing gas emissions to greenhouse effect, which scientists believe is the only way to reduce global warming.

Programs often involve forests and farmlands where indigenous and pastoral communities have lived sustainably, and there are numerous reports of land grabs and higher food prices linked to carbon markets in countries like Brazil. , India and Kenya.

Jackson added, “This program will exacerbate the very problem it claims to help solve by not actually reducing emissions. And it will distract from the real and urgent need for the United States to repay its climate debt through public finance.

Kelly Stone, senior policy analyst at ActionAid, said the United States had “failed repeatedly” to meet its climate finance obligations.

“It’s exhausting to hear this talking point over and over again while the United States still owes the Green Climate Fund money for a 2014-era commitment,” Stone said.

“Carbon markets have historically failed to meet climate goals and often deeply harm communities and undermine human rights.”

It’s a view shared by Mohamed Adow, director of think tank Powershift Africa, who said it was shameful that the United States continues to try to avoid paying its fair share for mitigation, adaptation, climate loss and damage.

“What we need are strong rules on emissions cuts and a comprehensive climate finance system that forces rich countries to deliver on their promises, not try to find finance from the couch in the backwaters. private sector,” Adow said. . “Private sector financing should be separate from the country’s obligations under the [United Nations Framework Convention on Climate Change].”

Kerry’s announcement came a day after the Africa Carbon Markets Initiative was launched by a consortium of African countries (Kenya, Malawi, Gabon, Nigeria and Togo) and carbon credit buyers and financiers. This program aims to produce 300 million carbon credits a year by 2030, rising to 1.5 billion credits by 2050, which promoters say will unlock $120 billion (£105 billion) and 110 million jobs by 2050.

Adow added: “African carbon credits, bought by Northern companies, are a false solution that will create loopholes for emissions reductions and will not provide the climate finance that Africa needs. Paying Africa to allow polluting industries and corporations to continue destroying the planet is just another type of neo-colonialism.

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