Carbon markets

Reading down the lengthy final agreement of the COP28 United Nations climate conference held in December 2023, you’ll go a long way before finding a strong, active verb. The lengthy recitation of climate impacts “notes with concern” and occasionally with “significant concern” glaring gaps in countries’ current policies. But while countries volunteered pledges to act, they were less keen to have those pledges framed as binding agreements in the final text. Reactions to COP28’s conclusion have been understandably mixed. Going into the talks, the world was more on track to avert catastrophic warming than it would have been without the 2015 Paris Agreement, but a long way from where it needs to be. Even if all the pledges made at COP28 are implemented, the world will still exceed the Paris goal of keeping global warming under 1.5 degrees Celsius (2.7 Fahrenheit) compared to preindustrial temperatures....

The United Nations climate conference is underway in Dubai, and representatives from around the world will be confronting an extraordinary array of challenges over its two weeks. They carry with them some long-held – and new – grievances, and strong expectations. Framing the agenda is a “global stocktake” – an assessment of progress toward the 2015 Paris Agreement to keep global warming in check. Unsurprisingly, as record-breaking extreme heat has underscored so powerfully in 2023, the world is not on track. To cut emissions, progress is needed on national economic and fiscal policies, such as taxing pollution and ending subsidies for fossil fuels that are even higher today than before the pandemic, and on funds and commitments to speed a global energy and economic transformation. Funding for adaptation and disaster recovery is also high on the agenda. The United Nations’ 2023 Emissions Gap Report show...

Carbon offsets have become big business as more companies make promises to protect the climate but can’t meet the goals on their own. When a company buys carbon offsets, it pays a project elsewhere to reduce greenhouse gas emissions on its behalf – by planting trees, for example, or generating renewable energy. The idea is that reducing greenhouse gas emissions anywhere pays off for the global climate. But not all offsets have the same value. There is growing skepticism about many of the offsets sold on voluntary carbon markets. In contrast to compliance markets, where companies buy and sell a limited number of allowances that are issued by regulators, these voluntary carbon markets have few rules that can be enforced consistently. Investigations have found that many voluntary offset projects, forest management projects in particular, have done little to benefit the climate despite their claims. I specialize in sustainable finance and corporate governance. My collea...

Carbon offsets have become big business as more companies make promises to protect the climate but can’t meet the goals on their own. When a company buys carbon offsets, it pays a project elsewhere to reduce greenhouse gas emissions on its behalf – by planting trees, for example, or generating renewable energy. The idea is that reducing greenhouse gas emissions anywhere pays off for the global climate. But not all offsets have the same value. There is growing skepticism about many of the offsets sold on voluntary carbon markets. In contrast to compliance markets, where companies buy and sell a limited number of allowances that are issued by regulators, these voluntary carbon markets have few rules that can be enforced consistently. Investigations have found that many voluntary offset projects, forest management projects in particular, have done little to benefit the climate despite their claims. I specialize in sustainable finance and corporate governance. My collea...