Yes, but not enough – Compensate on the Carney-led Taskforce Report

Thursday, February 4, 2021

If you’ve followed the voluntary carbon market, you’ve already heard of the taskforce looking at new quality standards for the whole industry. The group’s goal is to improve the credibility of carbon offsets – an important mission. You can learn more about this high-profile group and its work here or learn about its origins here .

Just now, the Taskforce has released the first product of their work: an initial recommendation paper, which you can find here .

Here’s what we think: The market – and the planet – needs so much more.

The report paints an accurate picture of the many problems in quality and transparency that the current market has. It also raises some long-awaited awareness and a sense of urgency for improving the situation.

The report is also on point on the urgency of the climate crisis: To have a chance of keeping global warming at the critical 1.5 degree threshold, the voluntary carbon capture market must grow to 15 times its current size by 2030. 

The report sets a roadmap of how to reach that goal, but doesn’t provide clear implementation recommendations nor solutions.

Here’s why that’s a problem.

We can not just offset more – or grow the market 15-fold as is. If we do not make sure that carbon credits are reliable and have a true, sustainable impact, the Taskforce risks merely repackaging the same old problems in fancier paper.

Here’s another way of saying that: Scaling the market without significantly increasing its integrity and transparency will not only be less effective for the climate, it will potentially harm the climate. Here our view mirrors that of Gold Standard .

So, as a market, as an industry, as humans truly fighting to save the climate, we must do better. We must raise the bar on sustainability.

Here are the main things we find problematic in the report. 

If they are not resolved, voluntary carbon capture will never become the powerful tool against climate change it could be. The report is referenced with “”.

Price

“Setting of core carbon reference contract and its price.” 

While price transparency and standardization is necessary, prices need to be set high enough. This in turn will encourage industries to reduce emissions and decarbonize. A price that is too low will incentivize companies to continue with business-as-usual and reach for low-cost carbon credits to offset their emissions.

“Low prices lead to worry over quality or create the perception that there is a lack of confidence in the market.” 

This cuts too many corners. Low-priced credits should not automatically be associated with low quality, nor high-priced credits with higher quality. In the current market, there are cheap credits with excellent quality, and expensive credits with terrible quality. Simply staring at prices is illogical: Increasing prices of terrible credits will not magically make them better.

Reliable baseline

“All carbon credits should be issued based on realistic and credible baselines.” 

While the report recommends a defensible, conservative, credible baseline and regular recalculations to create a “reliable” baseline, it doesn’t define what a reliable baseline is.

All existing carbon credits currently have, use and announce baselines. They have been deemed acceptable by their respective standards. This does not make them credible.

A new trend among forest-based projects is utilizing national and regional deforestation rates to set baselines. These values often don’t reflect the situation in the project area. Deforestation drivers, geographical characteristics (altitude, forest type, accessibility etc.), presence of logging, timber and palm oil concessions can all differ. Here too, baselines exist, but who’s to say that they’re credible?

In its second phase, the Taskforce needs to define clear rules for baseline setting, rules that match the realities of the project area. Using satellite technology is one promising method.

“Taskforce will not exclude projects based on vintage/project start date.”  

The market is currently saturated with hundreds of low-quality forest conservation projects . These projects are issuing millions of credits based on unrealistic deforestation projections, and hence have no real climate impact

If the Taskforce will not exclude existing projects, it must ensure old projects comply with new rules. At the very least, projects should adjust carbon credits issued to be in line with the true impact of the project.

Technology-based removal

“In the longer term, flows will have to shift towards removals incl. technology based removal with highly permanent geologic storage. BECCS and DACCS are too expensive today and will remain above $100 per ton until we make sufficient investment to drive down cost.” 

The Taskforce report supports bio-energy with carbon capture and storage (BECCS) and using direct air capture with carbon capture and storage (DACCS). 

We do not support the use of bio-energy for carbon capture. Trees are much more valuable as carbon sinks or as an alternative to fossil-based materials, rather than as energy. Even wood waste can be better used as a permanent carbon storage, in the form of e.g. biochar, as new technologies develop.

As for DACCS, we believe that it is at the least misleading to present this as a silver bullet that will instantly solve the climate crisis, without the need for cutting emissions.

Avoiding double counting 

“Taskforce does not take a view, but simply lays out various positions and points to other initiatives.” 

Two people can’t both take the credit for the same job. At least one of them is lying.

In order to make the claim that emissions have been compensated, it is simply not acceptable to use emission reduction or removals that have already been counted and claimed by the host country of the project. 

The Taskforce recognizes the double counting issue to some extent, but falls short in providing clear recommendations to solve it. If the voluntary market wants to drive climate action, then it should focus on directing financing towards new reductions, rather than reductions countries have already committed to achieving.

There are possible solutions too. Either the carbon inventories and reporting done by the host countries must be able to adjust to offsetters’ claims, or the offsetting claims must be adjusted.

Look.

The carbon capture industry is still relatively young, and therefore has some growing pains. In order to truly mitigate the climate crisis, we absolutely must remove excess CO₂ from the atmosphere, and carbon capture enables us to do that. To make a difference, it must be done well.

Experience has proven that while difficult, it is possible to find projects that match this high demand for quality. At Compensate, we believe it's our responsibility to keep building solutions. We welcome the Taskforce’s work and aim, but at the same time: We must do more.

We welcome the Taskforce’s work and aim, but at the same time: We must do more.

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