Beyond the Carbon Credit Controversy: How High-Quality Credits Drive Change
The role of carbon credits has been increasingly scrutinized, with critics claiming they provide a license to pollute. However, it’s crucial to recognize the nuances and understand the benefits of high-quality credits, which contribute to climate change mitigation and support global sustainability goals. In this blog post, we’ll explore whether investments in carbon credits correlate with slower decarbonization rates, where companies are allocating their resources, and why carbon removal truly matters.
Rates: A Closer Look
It’s important to distinguish between high-quality carbon credits and low-quality ones when assessing the impact on decarbonization rates. High-quality credits involve genuine, measurable, and additional emissions reductions or carbon removals that wouldn’t have occurred without the intervention of the project. These credits have a real and positive impact on the environment and communities involved.
A recent study by Sylvera analyzing the decarbonization rates of organizations investing in carbon credits posed a key question for the research:
Does investment in carbon credits hinder decarbonization among the world’s largest companies?
Sylvera analyzed data from 100 of the largest businesses across industries to see whether investments in carbon credits indicated slower decarbonization rates. The study drew the following conclusions:
- Decarbonization rates should be evaluated in context, as companies with larger reductions may have had high initial emissions.
- Investments in carbon credits positively coincide with decarbonization rates, disproving the claim that companies use credits to avoid emission reductions.
- High-quality carbon credits are vital for progressive climate strategies and should be pursued to fund carbon avoidance and removal projects.
- Mandatory and standardized climate disclosures are essential to track corporate climate action and hold companies accountable.
- Companies that reduce emissions and invest in high-quality carbon credits have a greater environmental impact, as they reduce more CO2e compared to those that only reduce emissions. This approach can unlock significant global environmental benefits.
Allocating Resources: Where Companies Are Investing
Corporate investments in carbon credits vary widely, with companies focusing on projects that align with their values, business models, and sustainability goals. Some invest in renewable energy projects, such as wind or solar farms, while others focus on reforestation or agroforestry initiatives that sequester carbon and support local communities.
A growing number of companies are investing in innovative carbon removal technologies like direct air capture, bioenergy with carbon capture and storage (BECCS), and also biochar. At Biochar Life, we train communities of smallholder farmers in the creation of biochar and help them generate c-sink credits, putting more money back into their hands while ensuring positive environmental impact. As well as helping to reverse the risks of climate change, our community focus touches on a number of the UN SDGs such as enhancing public health, and alleviating rural poverty. By supporting initiatives with a community-first approach, companies can contribute to global climate goals while also driving positive social and environmental impact.
Why Carbon Removal Matters
While reducing emissions remains the top priority in the fight against climate change, we must also remove carbon from the atmosphere to reach the Paris Agreement’s target of limiting global warming to below 1.5°C. The Intergovernmental Panel on Climate Change (IPCC) emphasizes that achieving this goal will require both aggressive decarbonization and large-scale carbon removal efforts.
Carbon removal projects, like those involving biochar or reforestation, not only sequester atmospheric carbon but also provide numerous co-benefits. They improve soil fertility, support biodiversity, and create jobs in rural areas. Furthermore, these projects often contribute to community empowerment, poverty alleviation, and enhanced public health. Additionally, as companies invest in carbon removal initiatives, they spur technological advancements and scale-up existing solutions, thereby accelerating the global transition to a low-carbon economy.
Quality Over Quantity
While carbon credits aren’t a panacea for climate change, they play an essential role in the global climate strategy. Emphasizing quality over quantity and supporting projects with tangible co-benefits will ensure that carbon credits serve as an effective tool for businesses to take meaningful climate action. By fostering collaboration among corporations, governments, and local communities, investments in high-quality carbon credits can drive technological innovation, enhance sustainability, and contribute to a more equitable and resilient future for all.
Join us in creating a more sustainable future for all by supporting Biochar Life’s community-led approach to biochar production and carbon removal — for more information get in touch at: hello@biochar.life
