KUCHING: Carbon credits, a popular means of offsetting greenhouse gas emissions, are under scrutiny due to concerns over their credibility and transparency.
According to Centre for Market Education (CME) economist Carmelo Ferlito, there were several issues surrounding the use of carbon credits, including the inconsistency between authorities that issued the credits and the potential risk of corruption in securing recognition for projects.
“In some cases, companies can obtain a green label by financing forestation projects, for example, while neglecting to implement changes in their production methods,” Ferlito explained. This could have created a misleading perception of environmental responsibility without addressing the underlying issue of reducing emissions.
“Carbon credits are not offsets in the way that a profit offsets a loss,” said Ferlito. “The accurate label for these credits is simply a voluntary ‘donation’ towards climate-friendly projects and not, as marketing for high-carbon products often claims, as a means to ‘offset’ the harmful climate impacts of the things we buy.”
Ferlito had also highlighted the risk of investing in projects that did not accomplish their stated goals, citing investigations that had uncovered questionable financing and projects.
He drew attention to a recent Wall Street Journal investigation that found that only a small amount of money designated for rainforest preservation in a project in Peru reached locals.
Furthermore, researchers from the National Aeronautics and Space Administration (NASA) and the University of California, Irvine, utilised satellite imagery and found that carbon credit projects in California provided no real climate benefit over ten years.
To address these concerns, the economist suggested that hiring and training people internally and working with independent auditors could have helped ensure the quality of carbon credit projects.
“‘Quality’ in the unregulated carbon credit market can be hard to come by and harder still to verify.
“Often described as a ‘wild west’ industry, too many projects have been found to harm the interests of local communities and offer false claims of actually making a difference to the amount of carbon dioxide (CO2) absorbed and stored,” he explained.
He added that planting enough trees to counterbalance global emissions without harming the food supply might not have been possible due to limited space on the planet.
“Enhancing natural sinks will only get us so far, getting to net zero by 2050 is not possible without a hard and fast reduction in emissions,” he concluded.
On Wednesday (March 15), during the opening of Asia Carbon conference 2023, Premier Datuk Patinggi Abang Johari Tun Openg announced that Sarawak had the potential to create carbon sinks from its permanent forest, promote carbon sequestration, and undertake tree planting schemes for carbon credits. He stated that the initiative could have provided the state with a new source of revenue ranging from RM315mil to RM1.04 billion annually.
