EU Mulls Over Using International Carbon Credits to Cut CO2
Critics warn that strict climate rules hurt economic competitiveness and progress.
Carbon credits are not free of scandals; some worry about their dark side.
Experts say carbon credits build strong connections with emerging markets by providing financial support and encouraging global cooperation on climate action.
According to sources privy to EU officials, the European Commission is eyeing international carbon credits and has mooted a debate on buying carbon credits from abroad as part of its 2040 climate target to cut emissions by 90%.
The proposal will allow EU countries to purchase credits from projects that reduce carbon dioxide (CO2) abroad—for example, reforestation in Brazil—instead of relying on domestic emission reductions.
The consideration comes amid various concerns and economic challenges, including strict EU climate policies and U.S. tariffs, which experts believe might hurt the industries further.
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The commission has faced several political pushbacks to its green policies, which delayed the official announcement of the 2040 goal. Some quarters say that a high emissions-cutting target could deal a heavy blow to domestic industries. In this regard, officials are considering the possibility of setting a lower target for domestic industries and planning to use international carbon credits to make up the difference.
Nevertheless, international carbon credits have their own drawbacks and credibility issues. There have been instances of such projects failing to achieve their intended goals, raising concerns about fraud and environmental integrity.
In 2013, the EU stopped using carbon credits following an oversupply of cheap credits, which led to a drop in the EU's carbon price. Experts say that strong vigilance is very much required to ensure the veracity of carbon credits in terms of emission reduction goals at a time when a new UN-backed carbon market is being developed with stricter safeguards.
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Another group of experts opined that there are benefits to the EU adopting carbon credits. It reinforces relationships with developing countries that need financial support for climate projects and encourages international cooperation on climate action.
The proposal is awaiting a final nod from the EU member states and the European Parliament.
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Source: Reuters
