PREVIEW
The EU is pushing ahead with carbon credit schemes despite criticism from its own advisory board
EU governments will be encouraged to use carbon credit schemes in Africa to count towards their own emissions reduction targets by 2040, under a new law tabled on 2 July.
‘The planet doesn’t care about where we take emissions out of the air,’ said EU Climate Commissioner Wopke Hoekstra on 2 July. The law will allow EU states to buy carbon credits from overseas projects from 2036. These credits, capped at 3% of total emissions, could be counted toward domestic CO2 targets as part of the EU’s push towards net zero.
The proposal was pushed by a group of countries including Germany, Italy and the Netherlands who complain that the EU’s net zero agenda risks hurting the bloc’s industrial competitiveness.
Carbon credit schemes have become a favourite of the EU as a way to encourage other countries, primarily in Africa and South-East Asia, to ‘green’ their economies. Hoekstra says that developing nations are eager to access European financing for activities like afforestation and forest restoration through carbon credit projects.
Under a proposal backed by the United Nations last year, carbon credits allow one country to pay for emissions-slashing projects in another and deduct the CO2 reduction from its own balance sheet.
Consultants McKinsey have forecast that ‘voluntary carbon markets’ could be worth over US$50 billion by 2030, prompting a handful of African countries, including Kenya and Tanzania, to sign a series of carbon offset deals (AC Vol 64 No 20, Concerns mount over carbon credit deals).
However, the European Scientific Advisory Board on Climate Change (ESABCC), set up to advise EU institutions, says that carbon credits are flawed and risk creating ‘perverse incentives’ for other countries to maintain or increase their own emissions. In Tanzania, one of the African states most enthusiastic about the credits, such projects are offset by major new investments in coal. The ESABCC warned that only 16% of credits issued to date have delivered ‘genuine emission reductions’.
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