US government to adopt carbon credits despite controversies

WASHINGTON – The Biden administration is set to unveil the first comprehensive guidelines for carbon markets on May 28, a move that could revolutionize the fight against global warming. Treasury Secretary Janet Yellen, along with other top officials, will introduce the framework aimed at promoting “high-integrity carbon markets” and restoring credibility to emission offsets.

The US government’s signal of support for carbon markets could potentially unlock billions of dollars for decarbonization efforts. Currently valued at around US$2 billion, the market for offsets could skyrocket to US$1 trillion by 2050 with increased demand and regulatory backing.

The guidelines will emphasize the importance of carbon credits representing real, additional, and permanent emission reductions. Companies will be urged not to use offsets to replace direct efforts to reduce emissions from their suppliers and customers, a contentious issue among climate experts.

While the principles align with existing standards on credit generation and claims, they do not explicitly endorse any specific regimes. The US officials will stress the role of voluntary carbon markets in achieving net zero emissions, as long as they prioritize high-integrity reductions and investments in nature-based projects and carbon-removal technologies.

Supporters of carbon markets hailed the announcement as a significant step towards driving capital towards sustainable projects, particularly in developing countries. However, critics warn that offsets could be misused, leading to greenwashing and diverting funds from genuine emission reduction efforts.

Despite the mixed reactions, the Biden administration’s backing of carbon markets marks a pivotal moment in the global fight against climate change. The unveiling of these guidelines could set the stage for a new era of climate action and investment in carbon-reducing initiatives.