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OPINION: Here's how to make ‘climate-neutral’ claims mean something

by Rachel Kyte | @rkyte365 | The Fletcher School, Tufts University
Thursday, 23 December 2021 08:00 GMT

FILE PHOTO: The leaf on the Apple symbol is tinted green to mark Earth Day at the Apple flagship store on 5th Ave in New York April 22, 2014. REUTERS/Brendan McDermid

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* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

Swift regulation is needed to ensure low-carbon products or flights are truly green – and indigenous rights are protected in the process

Rachel Kyte is co-chair of the Voluntary Carbon Markets Initiative and dean of The Fletcher School at Tufts University.

Late in the last day of COP26, climate talks were ongoing. Negotiators were sleep-deprived, and last-minute changes to positioning were creating roadblocks.

But as the teams trudged to the finish line, a pivotal change was delivered quietly. Without noise or fanfare, Glasgow agreed a rulebook for Article 6 of the Paris Agreement.

Two previous COPs had failed to achieve this; given that Article 6 sets out how countries can cooperate on reducing greenhouse gas emissions – in particular, through carbon markets that have long been the subject of controversy – this was perhaps no surprise.

While the Article 6 rulebook is now in place, there remains a lot of work to be done, including deciding which kinds of projects will be eligible, and how emission reductions and removals will be assessed and accounted for.

In parallel, individual governments will need to determine where investments through carbon markets can best support their greenhouse gas targets and broader sustainable development objectives. This will all take time.

In the meantime, we have become used to businesses, from retailers to airlines, offering us net-zero or climate-neutral products and services.

The Article 6 rules will go some way to ensuring that the carbon credits that underpin these claims are rooted in good science and have some degree of integrity. But they will not immediately provide the same guarantees for carbon credits from burgeoning voluntary carbon markets or substantiate the claims made by businesses. These are two essential parts of the carbon market puzzle.


Until now, businesses wanting to compensate for greenhouse gas emissions have bought carbon credits through markets that are entirely voluntary and, by their nature, unregulated.

Voluntary carbon markets can be a useful tool in enabling businesses to go beyond decarbonisation and channel much-needed private-sector finance to support country-level action to achieve the Paris Agreement targets, especially in the developing world. However, carbon markets are only useful if they truly enable the global economy to achieve the Paris Agreement temperature goal.

If the voluntary carbon market is to take flight, we very rapidly need to lay out the runway to regulation. And, as Glasgow aligned the inter-country standard for carbon trading with keeping 1.5C alive, so too must the voluntary market become part of – or very closely aligned with – the future Article 6 carbon market.

The challenge we now face is how we make that happen: defining what the runway from voluntary to regulated looks like, and how short it will be.

It must give businesses the confidence to invest in carbon credits and provide society with the confidence that these investments are truly aligned with keeping 1.5 alive. It must also offer Indigenous Peoples and local communities – for whom the nature-based projects from which many credits are likely to be generated reflect more than a means to an end - the assurance their rights are completely protected.

How? First, we need to target environmental claims. Every day, we see companies asserting they are, or will be, ‘net-zero’, ‘climate-neutral’, or a hundred variations on that theme. But if these claims are delivered only or mainly by offsetting emissions, rather than decarbonising in core value chains, they will not be compatible with keeping 1.5 alive.

The transition to regulation must revolve around the central understanding that carbon markets are used in the right way and that carbon credits must not replace, delay or obscure private-sector decarbonisation. The claims that companies make must reflect this inexorable logic.

Second, we need to ensure that countries hosting projects - and in particular Indigenous Peoples and local communities - have their rights protected and truly benefit from these finance flows. This means creating pathways for countries in the Global South to access voluntary carbon markets on terms that assure these rights and benefits.

The Voluntary Carbon Markets Integrity Initiative (VCMI) is driving progress on both.

In spring next year, we will deliver practical guidance for companies on how and under what circumstances they should use carbon credits and the claims they can credibly make about this use. This will ensure that companies genuinely “going the extra mile” are suitably recognised, alongside greenwashing by the rest. This guidance will cover claims ranging from products – carbon-neutral coffee, for example - to major multinational businesses’ net-zero transitions.

COP26 has given us a real opportunity to ensure carbon markets play a credible role in achieving the Paris Agreement temperature goal: now the real work begins.

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