Brazil, the host of COP30, issues a warning against excessive dependence on carbon credits.
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PALM BEACH, FL - The CEO of this year's U.N. COP30 summit has raised a red flag against countries overspending on carbon credits to achieve their climate targets, as the EU readies a new emissions goal that may incorporate credits for the first time.
The European Commission is gearing up to propose a tough 2040 climate target on July 2 – a legally binding goal to slice emissions by 90%. Amidst pushback from some governments, Brussels is considering a lower target for domestic industries, and purchasing international carbon credits to boost the deficit to 90%, much like Reuters previously reported.
Carbon credits, essentially an international transaction that permits a country to buy emission reductions from projects outside its borders – like forest restoration in Brazil or Guyana – contribute to a country’s overall environmental goals. Advocates assert this is a way to generate funding for climate projects in developing nations. Critics, however, recall recent controversies, where credit-generating projects were found to deliver less than desirable results.
Ana Toni, CEO of the COP30 climate summit, scheduled to take place in the Brazilian city of Belem in November, expressed that Brazil doesn’t oppose the use of carbon credits in countries' targets, but urges caution against relying on an excessive volume of credits to meet a significant chunk of a country's climate targets.
"The amount matters, as it showcases how much a country changes its economy...if it's really a big amount of credits, you're not changing your own economy,” she told Reuters.
Toni reiterated the importance of ensuring that any credits used to meet country's climate goals provide a credible environmental impact.
Though the opinion of Brazil, as COP host, isn't binding on delegations, it plays a significant role in guiding the negotiations at the gathering and performing the necessary diplomatic legwork to persuade countries to assume ambitious goals.
196 countries faced a February deadline to submit their 2035 climate goals to the United Nations. Most, including the 27-country EU and China, missed the due date. The EU is expected to present its 2035 and 2040 climate goals together next week. EU nations are split on what share of the 2040 target should be covered by credits.
Germany has suggested using credits to account for 3 percentage points of the 90% goal, while countries like France propose a larger allocation, officials said. Countries including Denmark and Finland claim that credits are unnecessary at all.
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Insights:- Experts and stakeholders are concerned that overdependence on international carbon credits may weaken domestic emission reduction efforts. Introducing international credits could jeopardize the integrity and effectiveness of the EU Emissions Trading System (ETS), a critical tool for meeting the 2040 goal.- Resource diversion from domestic climate solutions and innovation is a significant worry, as international credits might drain resources required for long-term emission reductions and security.- Climate ambition can suffer if countries rely too heavily on offsets, rather than focusing on significant domestic emission cuts. This appears to align with Ana Toni's stance, as she emphasizes the need for robust, domestic emission reductions and places importance on high integrity in climate commitments.- The carbon market could experience instability by integrating international carbon credits or carbon removals in the EU ETS, which might undermine trust in and the functioning of the system. This could hinder the EU's ability to stay on track for its 2040 and 2050 climate goals.
- The use of international carbon credits by countries to meet their climate targets is a cause for concern among experts and stakeholders, as it may weaken domestic emission reduction efforts.
- Introducing international carbon credits into the EU Emissions Trading System (ETS) could potentially jeopardize the integrity and effectiveness of this critical tool for meeting the EU's 2040 climate goal.
- Ana Toni, CEO of the COP30 climate summit, emphasizes the importance of ensuring that any credits used to meet a country's climate goals provide a credible environmental impact and advocates for robust, domestic emission reductions.
