The US government is seeking to bolster support for carbon offsets by putting its weight behind industry-led efforts to reform a market that has faced growing criticism.
The Biden administration has laid out for the first time a set of principles that attempt to define how “high-integrity” carbon credits can play “a meaningful role” in helping cut greenhouse gas emissions and channelling “a significant amount of private capital” to combat climate change.
A 12-page policy document released by the US government on Tuesday includes provisions to ensure that carbon credit projects deliver real emission reductions, avoid harming local communities and encourage companies to decarbonise their own operations before buying offsets.
But it also recommends that businesses should be allowed to use carbon credits to cancel out some of the emissions generated by their suppliers and customers, known as “Scope 3”. A similar move by the board of the Science Based Targets initiative (SBTi), a leading arbiter of corporate net zero plans, sparked a major backlash from staff last month.
The US government guidelines are neither binding nor enforceable. However, proponents hope they will reinforce a number of ongoing initiatives led by carbon credit developers, buyers and green groups to raise standards and boost the role of carbon markets in climate and nature protection.
Troubled market
Polluting companies, including major fossil fuel producers and airlines, spent an estimated $1.7 billion last year on voluntary carbon offsets meant to compensate their direct emissions by funding climate-friendly activities elsewhere, such as planting trees or rolling out renewable energy sources.
But a series of revelations questioning the environmental and social benefits claimed by some developers and users of carbon credits have dented confidence in the market.
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Scientific studies and investigative reports – including by Climate Home – have found that a growing number of projects failed to deliver the emission reductions promised. NGOs have also denounced instances of human rights abuse and environmental damage caused by carbon-offsetting activities.
“Voluntary carbon markets are a huge distraction and a waste of time and resources,” said Mohamed Adow, the Nairobi-based founder of the Power Shift Africa think-tank. “It’s sad to see politicians in the Global North desperately trying to find any way they can to avoid actually just cutting their carbon emissions,” he added.
Every tool needed
In its announcement, the US government acknowledged the shortcomings in voluntary carbon markets (VCMs), saying that “in too many instances” credits do not live up to the high standards required.
“For good reasons a lot of folks outside this room are skeptical,” National Climate Advisor Ali Zaidi told attendees of the policy launch in Washington. “[They are] scared off by news stories of things that went wrong and gloss of greenwash.”
US National Climate Advisor Ali Zaidi speaks during a press briefing at the White House in Washington, U.S., January 26, 2024. REUTERS/Julia Nikhinson
But, he added, that should not be seen as “an excuse to slow down but as an occasion to speed up” and do things better.
The Biden administration wants to be a leader in guiding “the development of VCMs toward high-quality and high-efficacy decarbonization actions”, the White House said. Its principles closely align with those of industry-led governance bodies that are trying to revamp the carbon market.
The Integrity Council for the Voluntary Carbon Market (ICVCM) is currently assessing project methodologies as part of its efforts to establish the first independent global benchmark for “high-integrity” carbon offsets, known as the “Core Carbon Principles”.
“We are in a climate emergency and we need every tool in the box to meet the 1.5°C [global warming] target,” said ICVCM Council Chair Annette Nazareth. “High-integrity carbon credits can mobilise private finance at scale for projects to reduce and remove billions of tonnes of emissions that would not otherwise be viable.”
Substitute for government aid
As most of the world’s largest carbon offsetting projects are based in the Global South, many rich governments view the market favourably as a way of getting dollars to developing nations without tapping into public budgets.
That is the case in the US where climate funding has fallen victim to political polarisation. President Joe Biden promised to increase international climate finance to over $11.4 billion per year by 2024. But Congress approved only a fraction of that as part of this year’s government budget: $1 billion of a spending package totalling $1.59 trillion.
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The White House’s Zaidi said voluntary carbon markets can move “mountains of capital” if their integrity is improved. Better regulation could expand the market from its current size of around $1.7 billion to $1.1 trillion by 2050, according to predictions by BloombergNEF.
Gilles Dufrasne, global policy lead at Carbon Market Watch, told Climate Home the US government will need to “walk the talk and ensure that its promises of transparency and integrity are followed up by actions”.
“There is currently no public data to measure how much finance is flowing to climate action through carbon credits and how much is staying in the pockets of Global North intermediaries and consultants,” he added.
International negotiations
The US government is also a strong proponent of private sector-led carbon credit initiatives in international climate circles.
In discussions at the COP28 climate summit last year on setting the rules for a new carbon market governed by the United Nations, Washington championed what observers described as a “light-touch, no-frills” approach that could hand a prominent role to private-sector players from the voluntary market.
The move was rejected by the European Union, causing a breakdown in the negotiations, which will resume at the mid-year UN climate talks in Bonn starting next week.
“By undermining the multilateral process […] and placing more faith in private sector-governed voluntary carbon markets, the US appears to be shirking its responsibilities for financing climate action and offloading them onto the private sector,” said Trishant Dev, a carbon market expert at the Delhi-based Centre for Science and Environment.
(Reporting by Matteo Civillini and Joe Lo; editing by Megan Rowling)
The post US government backs the carbon credit industry’s push to fix itself appeared first on Climate Home News.
US government backs the carbon credit industry’s push to fix itself
Claver Gatete is Executive Secretary of the UN Economic Commission for Africa. Jason Veysey is Energy Modeling Program Director and Senior Scientist at the Stockholm Environment Institute. Lisa Sachs is Director of the Columbia Center on Sustainable Investment at Columbia University.
The case for global energy transition has rarely been clearer. The closure of the Strait of Hormuz earlier this year exposed the cost of unplanned, fossil-dependent systems, while the falling cost of renewables, the rising penetration of electric vehicles, and the growing value of demand flexibility have made the direction of travel obvious. The benefits of a clean, secure, integrated system are no longer in dispute. What remains unclear is how to build it.
Countries around the world have called for faster renewable energy deployment and alternative energy arrangements. A secure, affordable, resilient, decarbonised system requires specific investments in specific places in a specific sequence, optimised across sectors and borders. But very few governments have the analytical foundation to translate those imperatives into investment.
The two instruments that are supposed to determine investment priorities for decarbonisation – Nationally Determined Contributions (NDCs) and country platforms – cannot answer the most basic question facing any country undertaking an energy transition: what should the energy system look like?
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To close this gap, every country needs a bankable, economy-wide optimisation model for its energy system. A model is not a plan, but it can help answer the critical question of what the future energy system should look like. It shows how optimal scenarios vary as assumptions and policies are adjusted, calculates investment requirements and sequencing, and quantifies how system costs are affected by assumptions, policies, and exogenous variables like trade policy and financing terms.
Tool for efficient investment
Optimisation is a simplified way of simulating an energy system, but it can be an extremely powerful tool for moving energy planning from reactive (how do we manage the disparate actions in the energy system?) to intentional (what energy system underpins our national objectives?). A model can show how optimal scenarios vary as assumptions and policies are adjusted, and how investment requirements are quantified and sequenced.
Optimisation models can treat the energy system and the sectors it serves as an integrated whole, optimising across sectors and projects in ways that can be mutually reinforcing. If considered independently, growth in industrial demand, transport electrification, and digital infrastructure can add stress to the energy system. But an optimised plan can arrange these and other changes in an efficient, synergistic way.
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New load can be added where low-cost power is available; industrial customers can ensure the viability of investments in energy supply; electric vehicle charging policy can smooth load curves and reduce costs for all consumers.
Additionally, optimisation modeling can also change the financeability of investments. Taken alone, each project faces uncertainty about the rest of the system, which raises the cost of capital and causes projects to stall or unwind after contracts are signed. A coherent, optimised plan makes visible the coordination that private capital would otherwise have to bet on: identified offtake, sequenced and committed transmission, contracted power supply, and so on.
What COP31 and COP32 should do
The upcoming COPs in Turkey and Ethiopia can shift the center of gravity of international climate cooperation from fragmented commitments to planning. Three moves are urgently needed.
First, optimised, economy-wide, long-term energy system planning must be the foundation on which any meaningful NDC, country platform, or finance commitment rests. NDCs are typically drafted by environment or single-line ministries, with limited cross-sectoral input from ministries of energy, finance, and planning. They contain targets, derived from sectoral strategies or national commitments, not from an analytically grounded picture of what the energy system should look like and what investments would make it work. Country platforms are generally a portfolio of investments assembled from existing project pipelines, rather than derived from a system-level analysis of what an optimised, decarbonised energy system would require.
Second, recognise regions as a key planning unit. Modern integrated energy systems are inherently regional. Renewable endowments are unevenly distributed; balancing variable supply across borders lowers aggregate cost, reduces redundant backup capacity, and unlocks economies of scale no individual nation can achieve. Many energy investments in Southeast Asia, East Africa, Southern Africa and Central Asia may only be financeable in a regional context. Assessing domestic infrastructure without regional optimisation perpetuates the perception that decarbonisation is more expensive than it is.
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Third, finance the planning capacity. A coordinated commitment by multilateral development banks, bilateral donors, and philanthropic partners to help every region and its constituent countries develop and maintain their own modelling capability, with open-source tools and regional analytical hubs, would close the most consequential gap in the current architecture. The cost is small relative to current spending on country platforms, failed project preparation, and misallocated infrastructure investment.
This includes supporting regional institutions such as the ASEAN Centre for Energy, the African Energy Commission, regional power pools, and the Latin American and Caribbean Energy Organization to determine what optimised regional systems require. Country-by-country pledging, repeated at every COP, will not deliver what meaningfully integrated systems can.
The 2026 energy crisis made the cost of unplanned, fossil-dependent systems newly visible. That window of clarity will close. The international community should seize the moment to build the planning foundation that has been missing for thirty years, rather than commissioning another round of NDCs or pledges, striving for outcomes neither was designed to deliver.
The post Every country needs a model to help optimise its energy transition appeared first on Climate Home News.
Every country needs a model to help optimise its energy transition
The world is currently experiencing what is expected to become the strongest El Niño on record – dubbed a “super El Niño” by many.
El Niño is the warm phase of a recurring climate pattern in the tropical Pacific that releases heat from the ocean into the atmosphere.
This temporarily raises global temperatures and reshapes rainfall and extreme weather around the world – impacting the lives of billions of people.
The current El Niño event began in June and is expected to last into 2027.
El Niño is part of a wider climate pattern called the El Niño-Southern Oscillation (ENSO) cycle.
The ENSO cycle also has a cool phase, known as La Niña, as well as a “neutral” phase. El Niño and La Niña events typically last between nine and 12 months, but can go on longer.
Below, Carbon Brief explains how the ENSO cycle works, its impacts on extreme weather and global temperatures and why this El Niño event is projected to be the most intense since records began.
The post Explainer: How the ‘super El Niño’ will reshape the world’s weather appeared first on Carbon Brief.
https://interactive.carbonbrief.org/el-nino-explainer/index.html
The second-largest reservoir in the US reached a record-low water height on Saturday – just days after the country’s largest reservoir broke its own record.
Both Lake Mead and Lake Powell are located on the Colorado River.
They provide water for populations across seven US states in the south-western US, with around 40 million people getting some or all of their municipal water from the Colorado River.
The river also provides water for around 5.5m acres (22,258 square kilometres) of farmland across Colorado, Arizona, California and the other states in the river basin.
Experts tell Carbon Brief that climate change, population growth and over-consumption are all contributing to the current record-low levels of the reservoirs.
Record lows
At full capacity, Lakes Mead and Powell can hold a combined 68 cubic kilometres of water – enough to supply all household consumption in the contiguous US for nearly 1.5 years. However, the water level in both reservoirs has been declining for decades.
The chart below shows the water level of Lake Mead, in metres above mean sea level. The reservoir, which began to fill in 1935 following the construction of the Hoover Dam, has a “full pool” maximum capacity of 347.60 metres. The water level in Lake Mead reached a record low of 317.11 metres on 7 August.
The following chart shows the water level of Lake Powell, in metres above mean sea level. Lake Powell’s full-pool level is 1,127.76 metres.
While the reservoir reached its maximum capacity several times in the 1980s, it has not done so since. On 15 August, the water level in Lake Powell was recorded at a new record-low of 1,072.87 metres.
Both reservoirs have continued to decline in the days since breaking their respective records. The downward trend will largely continue in both lakes until next spring, when the snowpack in the mountains of the Upper Colorado River Basin begins to melt, says Dr Jack Schmidt, a senior research scientist at Utah State University’s Center for Colorado River Studies. He tells Carbon Brief:
“The big dilemma of the moment is that we’re only in the middle of August, and we have no assurance of what the coming winter will be. The only thing we can be sure of is that we will be depleting overall total basin reservoir storage from now until, roughly, early April.”
Compounding factors
The record lows across the two reservoirs are the result of several compounding factors, experts tell Carbon Brief.
Since the turn of the 20th century, the amount of water flowing along the Upper Colorado River has declined by about 20%. Research suggests that half of this decline can be attributed to human-induced climate change.
Most of the river’s streamflow comes from the snowpack of the Upper Colorado River Basin, which stretches across five western US states but is primarily located in Colorado and Utah.
This region has been gripped by a historic “megadrought” for more than a quarter of a century. Nearly half of the megadrought’s intensity over 2000-18 is attributable to climate change, according to a 2020 study.
At the same time, the increasing population in the US south-west has put added pressure on the Colorado River’s water supply. The number of people obtaining some or all of their water from the Colorado system has grown by 15 million (around 60%) since 1992.
Schmidt tells Carbon Brief:
“There’s an ultimate cause of the present water crisis, and there’s a proximate cause. The ultimate cause is a warming climate, a warming planet and a pretty clear correlation between warming conditions and decreased runoff in the Colorado River Basin.
“The proximate cause is that in this messy democratic republic of ours, big policy decisions that match the variability of the climate occur painfully slowly – with intense political negotiations – and only incrementally.”
On 31 July, the US Bureau of Reclamation, which manages water resources in the western US, released an environmental impact statement on its proposed post-2026 strategy for managing Lakes Powell and Mead. The strategy itself has not been released yet.
Schmidt notes that the statement does appear to give the Bureau flexibility to “respond to crisis” by reducing the delivery of water to several states. However, he adds:
“They acknowledge it won’t work if we just stay critically dry, and of course every climate model for the 21st century, especially with a continually warming planet, says that that’s exactly what’s going to happen.”
The post Analysis: The two largest reservoirs in the US have hit record-low levels appeared first on Carbon Brief.
Analysis: The two largest reservoirs in the US have hit record-low levels
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