Opinion by Mathew Carr
This group of experts, whom I respect, are demonstrating muddled thinking when criticising these emission credits.
It’s about a deal where oil and natural gas company Hess spends $750 million on carbon credits linked to forest protection in Guyana at $20 a ton.
Yes, the Guyana credit-volume issued is generous by some flawed, current standards.
But SBTi (Science Based Target Initiative) rules are already supposedly protecting the reputation of carbon markets by making it against those rules to use emission offset credits to meet 2030 corporate targets, for instance.
Are the experts saying that those people / countries providing “lung services” for the world for free now should continue to do so, for free, indefinitely … or for how long? Is that really a fair outcome?
I’m up for a discussion about whether or when the regulators will catch up, but I’m not convinced imperfect deals should be stopped in the meantime.
Truth is, $20 a ton is too-low a price for these services, and they only cover a small portion of the (lung) services, or ecosystem services, provided.
Still, without the $750 million ultimately provided by Hess, the forest would be at risk, if not immediately at risk (ie it might not seem like it’s at risk right now, but look at the much-faster deforestation rates further south in the Amazon.)
Source: globalforestwatch.org ; Lung services = removing CO2 from the atmosphere and storing it in trees.
Meanwhile, in Brazil:
Source: as above – note the much faster rate of deforestation: 5.9% in Brazil vs 0.4% in Guyana.
Tighten OECD emission-limiting targets / corporation standards if there is a problem with carbon-market oversupply. That will spur more demand. As I said the incorrect response seems to be to try limit investment in programs that save forests (even if they seem imperfect right now).
Ultimately, all forest protection needs to be rewarded, as the experts acknowledge in their post.
Debate is fine, of course.
I agree Hess should refrain from calling the emission reductions “additional”. Additional definition: an activity that encourages emission reductions (or removals) that would not have happened without the activity.
Indeed both Hess and Guyana should be careful what they claim and the money trail should be super transparent and “results based.”
But to criticise the Hess shareholders, who have sacrificed the $750 million, for being early movers on climate action as laws change and become tighter and while politicians generally dither, seems perverse, especially if the criticism does not provide more context.
I would say $750 million IS a massive investment in forests. And it already happened this year.
I agree such deals should perhaps be limited to a tighter timeframe than 2022-2032.
Instead of thinking about the “high forest, low deforestation adjustment” as a bad thing, think of it as a premium offered that is still inadequate compared with the lung services provided.
The adjustment can be clawed back in deals beyond 2032.
Indeed, turning HFLD (high forest, low deforestation) adjustment into an acronym-based phrase makes the experts’ flawed argument much easier to put.
By acting, Hess is forcing the UN to get its act together.
Standards will get better and cover all forests. Right now, standards are not where they need to be.
A saved forest, on the other hand, is so much more than a single bird in the hand.
Carbon Pulse snip
Copy of Linked In Post
Charlotte Streck (She/Her) • 1st Managing Partner at Climate Focus
Mobilizing finance for conservation is absolutely essential to avoid future deforestation. It is my wish that 2023 will be the year when corporates start massively investing in forests. However, I do not think that this means that carbon markets should be used to create non-additional carbon credits. We, that is a group of expert authors, remain very concerned about ART/TREES HFLD methodology and the issuance of -what turns out- massive amounts of HFLD credits that can be used to meet net-zero goals and as compliance instruments. Here a sequel to our Carbon Pulse block from April:
#conservation #HFLD #carbonmarkets #REDD
Scott Settelmyer David Shoch Robert (Bob) O’Sullivan Sandra Greiner Simon Koenig Derik Broekhoff Lucio Pedroni Manuel Estrada Pedro Moura Costa Mark Trexler
Guyana and Exxon seek huge expansion of crude oil output. Have legal fight on their hands.