Carney offsetting taskforce to develop principles and governance body

New report from taskforce comes as NGOs question efficacy of market in tackling carbon emissions

A taskforce on carbon offsets co-founded by Mark Carney, the former Governor of the Bank of England, has said it plans to set up a governance body and develop principles for carbon offsetting. The announcement comes as NGOs voice concern that the offsetting market is “riddled with fraud and human rights abuses” and could be a distraction to genuine climate action.

Yesterday, the Taskforce on Scaling Voluntary Carbon Markets, launched its latest report at the World Economic Forum. Those involved in the initiative, chaired by Bill Winters, Group Chief Executive of Standard Chartered, say voluntary carbon offsets play a crucial role in achieving net zero global emissions and need to be scaled. 

Offsetting is a way of compensating for the generation of carbon emissions by reducing emissions elsewhere – or, in most cases, by paying for another party to reduce emissions. 

Responding to criticisms that offsets enabled companies to greenwash their polluting activities, Carney, speaking at WEF, said he “categorically rejected” this view. 

“I think part of this is putting companies on the hook,” he said. “1,500 of the world’s largest companies are now in a position of having a net-zero plan, rooted in science-based targets if those are available for your sector…all stakeholders around those companies will be scrutinizing those plans and offsets.”

One of the recommendations from the taskforce is for companies to be transparent on use of offsets.

Alongside concerns about greenwashing, a letter, co-ordinated by the Green Finance Observatory this week, says offsets have so far acted as “an enabler of current emissions”. It adds that the work of the taskforce “comes across as a weak attempt at rehabilitating offsets in the face of overwhelming evidence of their environmental failure and documented social issues”. 

The taskforce in its latest report notes that voluntary carbon markets have “multiple-pain points that need to be addressed” such as integrity and quality concerns, and outlines six topics for action in response. 

One of the six action topics is “market integrity assurance” and will see the taskforce working on establishing an umbrella governance body.

Speaking on this at WEF, Annette Nazareth, a former SEC Commissioner who is leading the work of the taskforce, said: “Governance is critical… This should include embedding transparency standards, setting and oversight of verification of emissions reductions from projects. It will also include ensuring projects boost biodiversity and carbon capture while respecting community and land rights.”

However, Marianne Tikkanen, Co-founder of puro.Earth, a market-place which sells carbon removal offsets to clients including Microsoft and Swiss Re, said existing standards for carbon offsets had not guaranteed high quality and questioned the usefulness of “setting another level of governance on top of the existing ones”. However, fellow Co-founder Antti Vihavainen pointed out that the new body could play a role in clarifying key points like the difference between “carbon removal” and “emission reduction” offsets. 

Microsoft founder Bill Gates, who spoke yesterday at the taskforce report launch, said the offsets market could be used to “bootstrap the market” for difficult innovations such as green fuel or green cement. 

Other actions by the taskforce will be to develop “core carbon principles” and develop infrastructure for the voluntary carbon markets. 

Agustin Silvani, finance lead at Conservation International, said he hoped the principles would help buyers identify high quality offsets more easily and establish that emission reductions in offsets were “real, additional and quantifiable”. 

The taskforce will continue stakeholder engagement over 2021. 

Read RI’s in-depth coverage on the Taskforce on Voluntary Carbon Markets:

RI Long Read: why is there such a schism in the voluntary carbon markets?

RI Long Read: What is happening to scale up the voluntary carbon markets?