According to the forecast from McKinsey, annual global demand for carbon credits could reach up to 1.5 to 2 billion metric tons of carbon dioxide by 2030 and up to 7 to 13 billion metric tons by midcentury.
This has steep implications for the voluntary carbon market: McKinsey estimates that in 2020 just a fraction of these totals were retired by buyers, at roughly 95 million metric tons.
Source: www.visualcapitalist.com
Eumedion, representing 53 institutional investors, urges all Dutch listed companies to draw up a transition plan in the coming year in order to operate fully climate neutrally by 2050 at the latest. The transition plan must contain short-, medium- and long-term CO2 emission reduction targets and set out how the company intends to achieve these targets. Companies are expected to report annually on the progress of the CO2 reduction targets.
This is stated in the Spearhead Letter 2022 of Eumedion. In the letter, the companies are encouraged to have the reduction targets validated by the Science Based Targets initiative (SBTi) and audited by the external auditor. The reduction targets must relate to the own activities as well as those of suppliers, customers and end users (ie the entire ‘value chain’; the so-called scope 1, 2 and 3). The letter does not deal with the instruments needed for meeting the targets, but is is clear that large scale offsetting is needed on top of a massive reduction in the use of fossil fuels.
Source: www.eumedion.nl
The market for carbon offsets needs to be increased massively and quickly and standardized, according to Karen Fang, Head of Global Sustainable Finance at the Bank of America. Don’t let perfect be the enemy of the good she said in an interview with CNBC. According to her, using offsets is not a sign of being lazy, it’s a reality of decarbonisation goals set by companies and governments.
The Bank of America analyzed recently that achieving net-zero emissions by 2050 could require as much as a fifty fold increase in the offset market. At the very low-end the market for offsets will quadruple, the bank said.
A new study by Oxfam, called “Tightening the Net” shows here is a very real risk that the explosion in net zero commitments will fuel a new surge in demand for land, particularly in low- and middle-income countries, which would lead to mass displacement and hunger. Lees meer
In a recent report of the World Economic Forum and McKinsey it was estimated that Natural Climate Solutions have the potential to deliver up to one third of the net-emission reduction required to stay on track for a 1,5-2 degrees scenario by 2030. A large part of that reduction potential (60%) comes from avoided deforestation, while only 15% comes from reforestation. This reflects the fact that avoided deforestation offers up to nine times as much potential low-cost abatement as reforestation.
www3.weforum.org/docs/WEF_Consultation_Nature_and_Net_Zero_2021.pdf
In a recent article in The Conservation the author Bonnie Waring states that if we maximize the storage capacity of the earth’s vegetation (especially by planting trees), we’d sequester about ten years of global emissions at current rate.
After that there could be no further increase in carbon capture. In addition, large scale planting can have a devastating effect on biodiversity. To avoid such damage, we must refrain from establishing forests where they naturally don’t belong and avoid ‘perverse incentives’ to cut down existing forest in order to plant new trees. Keeping in mind that naturally established forests contain more species of plants and animals than plantation forest and often contain more carbon.
So it makes sense to prioritize saving existing mature forests over planting new trees and to be realistic about the potential of nature based solutions
Since the formal start of the REDD+ Business Initiative in 2013, its members collectively purchased CO2 credits from REDD+ projects to the equivalent of 16,1 MtCO2. Lees meer
The Taskforce on Scaling the Voluntary Carbon Market (TSVCM), launched in September 2020, is a private sector-led initiative working to scale an effective, efficient and functioning voluntary carbon market to help meet the goals of the Paris Climate Agreement. Lees meer
A delegation of CEO’s, representing the REDD+ Business Initiative and FSC NL, visited Executive Vice President of the European Commission Frans Timmermans on March 3d. The reason for the visit was the Communication “Stepping up EU Action to Protect and Restore the World’s Forests” (July 2019).
Our message was that the emphasis in this Communication on deforestation-free supply chains is important, but needs to be complemented with instruments that give the still standing forests an economic value, like REDD+ and FSC-certification. This is essential for building a sound business case for the conservation and sustainable use of forests to the benefit of local communities. Therefore we asked the Commission to consider formal integration of REDD+ in EUs climate policy (including the use of market mechanisms) and a mandatory use of sustainable EU market.
Mr. Timmermans welcomed our approach and our views and asked the participating companies to actively share their motivations and results in company networks and industry organisations as it will support the transition to a Green Economy. The discussions with the Commission is ongoing.
www.ec.europa.eu/info/sites/info/files/communication-eu-action-protect-restore-forests_en.pdf
