The first-ever exchange of carbon credits between countries under a new Paris Agreement mechanism is facing criticism over whether the offsets deliver the emission reductions claimed.
Switzerland has bought from Thailand the first batch of carbon offsets under the mechanism, created through the rollout of electric buses in the Thai capital Bangkok as part of a bilateral partnership.
It is the first-ever completed transaction under article 6.2 of the Paris Agreement and the parties involved hailed it as a “beacon moment for climate action” and “a very important milestone”.
But an umbrella group for Swiss charities said the switch to electric buses “would have most certainly happened” without the offsets, raising questions over their integrity.
The Swiss government plans to use the credits towards achieving its emissions reduction goals under the Paris Agreement. If the quality concerns are correct, that means Switzerland would be given a licence to pollute without funding real climate action.
The controversy raises questions over the regulation of the offsets traded under the system. Currently, there is no centralised oversight of the credits and an EU attempt to introduce tighter controls at Cop28 failed.
Swiss-Thai cooperation
Switzerland is one of the most active proponents of bilateral credit trading under article 6. The December transaction is part of a wider agreement signed between Switzerland and Thailand in early 2023.
While the credits will ultimately be used in government plans, private operators are tasked with carrying out the project.
The project is coordinated by South Pole, a Swiss company that is one of the world’s leading sellers of carbon credits and has been mired in controversy over the last year.
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Energy Absolute, a Thai renewable energy company, is generating credits by converting thousands of petrol-fueled private buses in Bangkok to electric vehicles. Switzerland’s Klik Foundation, which represents fossil fuel importers in the country, is funding the programme through the purchase of credits.
Swiss law requires fuel importers to compensate for part of their carbon dioxide emissions. The Klik Foundation buys credits on the companies’ behalf and finally transfers them to the federal government, which will count them towards its emission reduction targets.
The Thai electric bus scheme is among dozens the Swiss group is looking to implement across the world.
Additionality doubts
The Thai project developers claim that, without the funding guaranteed by the sale of offsets, the switch to electric buses would have not been economically viable.
So the offsets will cut emissions beyond what would have happened anyway, they argue. This is known as ‘additionality’.
Alliance Sud disputes this, casting doubts over the integrity of the credits. In a research dossier, it claimed “additionality is at best non-transparent, and at worst, non-existent”.
Alliance Sud said the economic justification for the project failed to take into account the long-term benefits of direct investment from the Energy Absolute group, which specialises in renewable energy and electric vehicle manufacturing.
An e-bus operated by Thai Smile Bus, the beneficiary of the offsetting scheme. Photo: Patiparn.Nice2002bkk
It found that the same transport operator targeted by the project had already been running electric buses in Bangkok well before the start of the offsetting scheme – as early as 2021, over a year before the start of the project.
In a statement, the Klik Foundation did not address the buses seen in 2021 but says “the first 120 buses” seen in 2022 were just a pilot programme.
“This project shows it is basically impossible to have a guarantee that these certificates can be a real substitute of domestic emission reductions which Switzerland should instead focus on,” Delia Berner, an international climate policy analyst at Alliance Sud, told Climate Home. “Switzerland is leading in a negative way”.
‘Pure speculation’
Mischa Classen, an independent carbon market consultant and former director of the Klik Foundation, disagrees with Alliance Sud’s analysis.
“From my knowledge, Thailand has no policy intervention that would support private bus operators to switch to electric, which is the main additionality argument in this project. There’s no economic reason for a private company to use [electric] buses that are more expensive than others”, he added.
A spokesperson for the Klik Foundation told Climate Home the Alliance Sud’s claims on additionality are “pure speculation”. “Energy Absolute needs the financial support through the purchase of credits to make the project feasible”, they said.
A spokesperson for the Swiss Federal Office of the Environment (FOEN) said that only offsets that generate additional emissions cuts would be approved, following checks with the environmental authority of the host country. “In the view of the FOEN, as well as the Thai authority, this is the case with the e-bus project in Bangkok”, it added.
Swiss government plans
Switzerland has been among the most active countries in signing preliminary agreements for the bilateral exchange of offsets. The government expects to achieve a third of its total emission reduction by 2030 through projects abroad.
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It is pushing ahead with the rollout of these deals despite a lack of certainty over the rules governing the mechanism.
Talks over article 6.2 of the Paris Agreement collapsed at Cop28 following a bitter dispute over integrity, with the European Union pushing for stricter rules and the USA wanting more flexibility.
While negotiators will try again to strike a deal at Cop29 in November, countries can still go ahead with their agreements under an initial rulebook agreed in Glasgow.
Classen says Switzerland’s first transaction is adding to positive momentum for countries that are already seriously interested in Article 6.
“It is the final result of a long, hard process and it is not a decision you can just switch on or off. You need well-designed bilateral agreements setting minimum standards and a lot of political labour to establish carbon market regulations. The case of Thailand shows that it’s possible”, he added.
The post First ever Paris Agreement offsets face integrity questions appeared first on Climate Home News.
Climate Change
Big fishing nations secure last-minute seat to write rules on deep sea conservation
As a treaty to protect the High Seas entered into force this month with backing from more than 80 countries, major fishing nations China, Japan and Brazil secured a last-minute seat at the table to negotiate the procedural rules, funding and other key issues ahead of the treaty’s first COP.
The Biodiversity Beyond National Jurisdiction (BBNJ) pact – known as the High Seas Treaty – was agreed in 2023. It is seen as key to achieving a global goal to protect at least 30% of the planet’s ecosystems by 2030, as it lays the legal foundation for creating international marine protected areas (MPAs) in the deep ocean. The high seas encompass two-thirds of the world’s ocean.
Last September, the treaty reached the key threshold of 60 national ratifications needed for it to enter into force – a number that has kept growing and currently stands at 83. In total, 145 countries have signed the pact, which indicates their intention to ratify it. The treaty formally took effect on January 17.
“In a world of accelerating crises – climate change, biodiversity loss and pollution – the agreement fills a critical governance gap to secure a resilient and productive ocean for all,” UN Secretary-General António Guterres said in a statement.
Julio Cordano, Chile’s director of environment, climate change and oceans, said the treaty is “one of the most important victories of our time”. He added that the Nazca and Salas y Gómez ridge – off the coast of South America in the Pacific – could be one of the first intact biodiversity hotspots to gain protection.
Scientists have warned the ocean is losing its capacity to act as a carbon sink, as emissions and global temperatures rise. Currently, the ocean traps around 90% of the excess planetary heat building up from global warming. Marine protected areas could become a tool to restore “blue carbon sinks”, by boosting carbon absorption in the seafloor and protecting carbon-trapping organisms such as microalgae.
Last-minute ratifications
Countries that have ratified the BBNJ will now be bound by some of its rules, including a key provision requiring countries to carry out environmental impact assessments (EIA) for activities that could have an impact on the deep ocean’s biodiversity, such as fisheries.
Activities that affect the ocean floor, such as deep-sea mining, will still fall under the jurisdiction of the International Seabed Authority (ISA).
Nations are still negotiating the rules of the BBNJ’s other provisions, including creating new MPAs and sharing genetic resources from biodiversity in the deep ocean. They will meet in one last negotiating session in late March, ahead of the treaty’s first COP (conference of the parties) set to take place in late 2026 or early 2027.
China and Japan – which are major fishing nations that operate in deep waters – ratified the BBNJ in December 2025, just as the treaty was about to enter into force. Other top fishing nations on the high seas like South Korea and Spain had already ratified the BBNJ last year.
Power play: Can a defensive Europe stick with decarbonisation in Davos?
Tom Pickerell, ocean programme director at the World Resources Institute (WRI), said that while the last-minute ratifications from China, Japan and Brazil were not required for the treaty’s entry into force, they were about high-seas players ensuring they have a “seat at the table”.
“As major fishing nations and geopolitical powers, these countries recognise that upcoming BBNJ COP negotiations will shape rules affecting critical commercial sectors – from shipping and fisheries to biotechnology – and influence how governments engage with the treaty going forward,” Pickerell told Climate Home News.
Some major Western countries – including the US, Canada, Germany and the UK – have yet to ratify the treaty and unless they do, they will be left out of drafting its procedural rules. A group of 18 environmental groups urged the UK government to ratify it quickly, saying it would be a “failure of leadership” to miss the BBNJ’s first COP.
Finalising the rules
Countries will meet from March 23 to April 2 for the treaty’s last “preparatory commission” (PrepCom) session in New York, which is set to draft a proposal for the treaty’s procedural rules, among them on funding processes and where the secretariat will be hosted – with current offers coming from China in the city of Xiamen, Chile’s Valparaiso and Brussels in Belgium.
Janine Felson, a diplomat from Belize and co-chair of the “PrepCom”, told journalists in an online briefing “we’re now at a critical stage” because, with the treaty having entered into force, the preparatory commission is “pretty much a definitive moment for the agreement”.
Felson said countries will meet to “tidy up those rules that are necessary for the conference of the parties to convene” and for states to begin implementation. The first COP will adopt the rules of engagement.
She noted there are “some contentious issues” on whether the BBNJ should follow the structure of other international treaties such as the Convention on Biological Diversity (CBD), as well as differing opinions on how prescriptive its procedures should be.
“While there is this tension on how far can we be held to precedent, there is also recognition that this BBNJ agreement has quite a bit to contribute in enhancing global ocean governance,” she added.
The post Big fishing nations secure last-minute seat to write rules on deep sea conservation appeared first on Climate Home News.
Big fishing nations secure last-minute seat to write rules on deep sea conservation
Climate Change
Climate at Davos: Energy security in the geopolitical driving seat
The annual World Economic Forum got underway on Tuesday in the Swiss ski resort of Davos, providing a snowy stage for government and business leaders to opine on international affairs. With attention focused on the latest crisis – a potential US-European trade war over Greenland – climate change has slid down the agenda.
Despite this, a number of panels are addressing issues like electric vehicles, energy security and climate science. Keep up with top takeaways from those discussions and other climate news from Davos in our bulletin, which we’ll update throughout the day.
From oil to electrons – energy security enters a new era
Energy crises spurred by geopolitical tensions are nothing new – remember the 1970s oil shock spurred by the embargo Arab producers slapped on countries that had supported Israel during the Yom Kippur War, leading to rocketing inflation and huge economic pain.
But, a Davos panel on energy security heard, the situation has since changed. Oil now accounts for less than 30% of the world’s energy supply, down from more than 50% in 1973. This shift, combined with a supply glut, means oil is taking more of a back seat, according to International Energy Agency boss Fatih Birol.
Instead, in an “age of electricity” driven by transport and technology, energy diplomacy is more focused on key elements of that supply chain, in the form of critical minerals, natural gas and the security buffer renewables can provide. That requires new thinking, Birol added.
“Energy and geopolitics were always interwoven but I have never ever seen that the energy security risks are so multiplied,” he said. “Energy security, in my view, should be elevated to the level of national security today.”
In this context, he noted how many countries are now seeking to generate their own energy as far as possible, including from nuclear and renewables, and when doing energy deals, they are considering not only costs but also whether they can rely on partners in the long-term.
In the case of Europe – which saw energy prices jump after sanctions on Russian gas imports in the wake of Moscow’s invasion of Ukraine – energy security rooted in homegrown supply is a top priority, European Commission President Ursula von der Leyen said in Davos on Tuesday.
Outlining the bloc’s “affordable energy action plan” in a keynote speech at the World Economic Forum, she emphasised that Europe is “massively investing in our energy security and independence” with interconnectors and grids based on domestically produced sources of power.
The EU, she said, is trying to promote nuclear and renewables as much as possible “to bring down prices and cut dependencies; to put an end to price volatility, manipulation and supply shocks,” calling for a faster transition to clean energy.
“Because homegrown, reliable, resilient and cheaper energy will drive our economic growth and deliver for Europeans and secure our independence,” she added.
Comment – Power play: Can a defensive Europe stick with decarbonisation in Davos?
AES boss calls for “more technical talk” on supply chains
Earlier, the energy security panel tackled the risks related to supply chains for clean energy and electrification, which are being partly fuelled by rising demand from data centres and electric vehicles.
The minerals and metals that are required for batteries, cables and other components are largely under the control of China, which has invested massively in extracting and processing those materials both at home and overseas. Efforts to boost energy security by breaking dependence on China will continue shaping diplomacy now and in the future, the experts noted.
Copper – a key raw material for the energy transition – is set for a 70% increase in demand over the next 25 years, said Mike Henry, CEO of mining giant BHP, with remaining deposits now harder to exploit. Prices are on an upward trend, and this offers opportunities for Latin America, a region rich in the metal, he added.
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Andrés Gluski, CEO of AES – which describes itself as “the largest US-based global power company”, generating and selling all kinds of energy to companies – said there is a lack of discussion about supply chains compared with ideological positioning on energy sources.
Instead he called for “more technical talk” about boosting battery storage to smooth out electricity supply and using existing infrastructure “smarter”. While new nuclear technologies such as small modular reactors are promising, it will be at least a decade before they can be deployed effectively, he noted.
In the meantime, with electricity demand rising rapidly, the politicisation of the debate around renewables as an energy source “makes no sense whatsoever”, he added.
The post Climate at Davos: Energy security in the geopolitical driving seat appeared first on Climate Home News.
Climate at Davos: Energy security in the geopolitical driving seat
Climate Change
A Record Wildfire Season Inspires Wyoming to Prepare for an Increasingly Fiery Future
As the Cowboy State faces larger and costlier blazes, scientists warn that the flames could make many of its iconic landscapes unrecognizable within decades.
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