EDITORIAL: Carbon markets have long been a target of mainstream media, but they still survive
Quantum Commodity Intelligence – Welcome to Quantum Commodity Intelligence's latest product – the bi-weekly Carbon Insights publication, which aims to deliver a range of coverage on the voluntary carbon market (VCM), including opinion, analysis, features, news and pricing.
The launch of Carbon Insights comes in the wake of yet another high-profile media "broadside" – as one prominent carbon standard called it – attacking the VCM, adding to a raft of articles and academic papers this year that have called into question the integrity of many aspects of the market in addressing climate change.
US-based carbon standard Verra has borne the brunt of a lot of the criticism, but others have not been exempt from this with Gold Standard and American Carbon Registry projects included in the latest article from UK newspaper The Guardian's seemingly ongoing campaign against carbon credits.
The Guardian criticism is nothing new
If you're UK-based and have been active in carbon markets for the last couple of decades or so, The Guardian's position on carbon crediting mechanisms that have been the theme of articles this year will come as nothing new. Back in the 'noughties' and beyond the newspaper found ire with the Kyoto Protocol's Clean Development Mechanism (CDM) and, in particular, projects that cut emissions of the potent greenhouse gas HFC23 on an industrial scale.
Without doubt HFC23 destruction projects were controversial, but at the same time, back then, the CDM and carbon crediting at that scale was fairly new and the phrase "learning-by-doing" was key tenet of the UNFCCC's philosophy in evolving Kyoto's flexible mechanisms. Basically, 'let's get on with this now, rather than wait to make things perfect for everyone' – if the latter was/is ever possible. And no-one had a real incentive to cut HF23 emissions from industrial plants.
"Are carbon markets an easy target? – disliked by one side of the political spectrum because they are 'green' and on the other because they are a market-based mechanism"
Learning-by-doing is also how the VCM has evolved over the years and continues to evolve. As time goes on, knowledge and experience are accumulated, while a myriad of different technologies are now available to enhance many aspects of project development. Undoubtebly, there are going to be some issues with projects, and given the global scrutiny and availability of data in this market, compared with others, leaves the market far more open to criticism than elsewhere.
The current campaigns against the VCM seem far more concerted than anything similar examining major climate polluters – both companies and countries. So are carbon markets an easy target? Disliked by one side of the political spectrum because they are supposedly 'green' and on the other because they are a market-based mechanism.
A credible alternative to carbon finance
What the critics fail to do is to come up with any credible alternative that will channel similar huge sums of money to climate mitigation that has been seen through carbon trading. And until they do, is not a mechanism that puts itself under intense scrutiny as part of an evolving process as good as anything there is currently to make a contribution to cutting and avoiding large volumes of GHG emissions?
Just over 10 years ago I stopped reporting on carbon markets after more than a decade covering the sector. Prices in the world's biggest market, the EU Emissions Trading Scheme (ETS), were worth little more than a couple of euros on the back of oversupply and scandals, such as the one related to value-added tax in the EU ETS. More than a decade on and prices in the EU market are nearer €100/tCO2e than zero.
Just over a year into my return to covering carbon and the VCM is rocked by scandals that have pushed many prices to just a couple of euros or less. But there are many efforts to try and address the market's problems and had been before the mainstream media decided to turn its attention to it. There's no reason why – particularly with expected growth in the removals side of the market – the VCM can't recover also in the years ahead.