John Kerry, the climate envoy for U.S. president Joe Biden, is said to have spoken with national governments and business organizations to gain support for the proposal. According to Reuters, it is expected to be revealed on Wednesday at the UN climate summit in Sharm el-Sheikh, Egypt.
Kerry stated last month that one of the things being looked at is the potential for the private sector to be persuaded to participate, according to the Financial Times. In order to directly reduce emissions, he continued, money will be diverted into the closure of some coal facilities and the purchase of renewable energy sources.
According to the concept, which was first published by the Financial Times on Sunday, regional or national governments would accumulate carbon credits by decommissioning fossil fuel infrastructure like coal-fired facilities and replacing it with renewable energy.
Then, private businesses might buy these credits to make up for their greenhouse gas emissions. The program would be voluntary and would be approved by an unidentified impartial body.
According to The Washington Post, the plan’s goal is to encourage private businesses to support the transition to renewable energy in developing nations. According to Reuters, fossil fuel corporations would not be permitted to take part.
There are numerous possible flaws in the plan. Carbon offsets are already contentious, for one thing, because they allow businesses to continue polluting without any actual assurance that an equivalent quantity of carbon will be removed from the atmosphere to make up for it.
In this situation, a business that buys carbon credits from a coal plant converted into a wind farm, for instance, would only genuinely offset its emissions if the conversion would not occur without the company’s support.
The Financial Times was informed by people familiar with the scheme that its offsets mechanism was not yet sufficiently solid.
You cannot have something as important as carbon credits half-baked. The unnamed source claimed that the guidelines and specifics were important. Throwing offsets into the equation is the fastest way to enrage folks.
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Another issue with offsets is that they serve as a diversion from the fundamental fact that, in order to keep global warming below 1.5 degrees Celsius and prevent the worst effects of the climate crisis, every country and corporation must reduce its real emissions as quickly as feasible.
However, there is a compelling case for finding a method to involve the private sector in the transition to sustainable energy in developing countries. The developed world has yet to fulfill its promise to donate $100 billion annually by 2020 to assist developing countries in weaning themselves off of fossil fuels and preparing for the effects of climate change.
And the actual demands are far bigger, according to John D. Podesta, Biden’s senior counselor on climate change, who told The Washington Post that $3.8 trillion in investments will be needed annually over the next three years. Only 16 percent of it has come to pass thus far.
The real money is in capital flows in the private sector, according to Podesta. When trillions are needed, we’re only talking about billions. If we don’t open up the [private sector] for people to invest in creating a sustainable energy future, we won’t be able to meet both the development and climate goals.
However, many leaders in the Global South are angry about the unfulfilled promises of their colleagues in the Global North and have misgivings about corporate financing.
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Are we genuinely addressing climate change, or are we only making promises to the corporate sector in order to ensure profits? Prior to COP27, Egypt’s chief climate negotiator Mohamed Nasr spoke to the media, according to The Washington Post.
The way we think needs to alter. Investors should consider their projects’ positive effects on the environment while evaluating them and how well they will be executed.