India, which generates one-fifth of the world’s carbon credits, is at the forefront of carbon investment. The current carbon markets could end up increasing emissions in the world
Buying and selling carbon, otherwise known as the carbon market, is seen as an important way to combat climate change.
Extreme weather events are costing all economies. Thus, the idea of gaining credits for reducing greenhouse gases and then trading those credits for the right price can not only help developing nations financially but also transition to a clean economy. It is a win-win scenario.
However, many of these stories highlight the loopholes in the carbon markets. This makes matters worse as it creates a positive facade to an ever-growing problem.
Because of this carbon market, you will be able to pick up a luxury bag that is labelled “carbon-neutral”; or take a flight that has “offset” your emissions; or even read about an oil or food company that has declared a “net-carbon footprint”.
You may wonder how? These items and companies become carbon-neutral by “buying” credits which are issued against certain planet-healing activities. Think of these activities as credit cards that either reduce greenhouse gas emissions (like building a solar plant or using an efficient cookstove) or remove greenhouse gases from the atmosphere (for instance, by planting trees).
The management of this “market” of buyers and sellers is done through paraphernalia of registries, project developers, validators, verifiers and carbon exchanges.
There is no ‘official’ carbon market in the world, as the global community is still discussing the rules that will govern such a trade. But in the past decade or so, a voluntary carbon market (VCM) has grown with projects across the world.
India, which generates one-fifth of the world’s carbon credits, is at the forefront of carbon investment. The current carbon markets could end up increasing emissions in the world.
The buyer of the credit—say an airline company that has assured its customers to offset its carbon footprint or a food company that has declared itself net-zero—have continued to emit; they have even increased their emissions, saying that they have bought credits.
But as these credits have been over-estimated or do not really exist, the reductions are notional. This is a double jeopardy. This is also the agenda for the upcoming COP28.
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