A SWING AT OFFSETS — The Biden administration is stepping into the carbon offsets debate in a big way, laying out new guardrails for corporate participation that could help boost confidence in markets that have come under heavy fire in recent years. The set of best practices released today were discussed at an event featuring officials including Treasury Secretary Janet Yellen and Energy Secretary Jennifer Granholm are voluntary and so don’t appear to carry much weight in terms of enforcement. But they offer a signal of the administration’s intent to restore confidence in the potential for offsets to help reach net-zero emissions goals. The fact that it’s on the minds of the top White House officials and cabinet secretaries is noteworthy given the radioactive nature of offsets — a promising tool to fight climate change but one that has bedeviled climate wonks over tricky accounting, questions about corporations’ prioritizing them over absolute reductions and claims that they can be used for greenwashing. "These principles are about laying our marker as a U.S. government on how this one type of tool can best support our climate goals and complement the rest of our climate and clean energy efforts at home and on the international stage,” John Podesta, White House senior adviser for international climate policy, said at the event promoting the new principles. While carbon credits can be helpful, market participants must be certain that one credit represents one metric ton of carbon dioxide removed from or kept from being released into the atmosphere beyond what would have otherwise occurred, the administration said in the guidance. The guidance also said companies should prioritize “measurable and feasible emissions reductions” — and that any carbon credits purchased and the activities that generate them should meet high standards and show “real decarbonization” while avoiding other harms. Public claims by credit users should also accurately reflect the nature of their purchased and retired credits — a nod to other federal efforts from the Federal Trade Commission and Commodity Futures Trading Commission to scrutinize environmental marketing claims. All of that is pretty much common sense, but the White House imprimatur could impart extra meaning that could encourage private-sector efforts to bolster the market's integrity. White House National Climate Advisor Ali Zaidi said a lot of people “are skeptical about the role that voluntary carbon markets can play” and are scared by news reports about greenwashing and what has gone wrong with offsets in the past. “The key is this: To see the voluntary markets as a complement, as a way to actually run out faster than compliance markets, run out faster than what is mandatory,” Zaidi said. One particularly noteworthy point on a sticky subject: The guidance supports allowing companies to count credits toward Scope 3 emissions, those generated by a corporation’s value chain, in cases where it would be “unreasonable to expect a company to be able to fully abate those emissions within a given timeframe.” You don’t need to look far to get a sense of the intensity around that debate in particular. The board of the Science-Based Targets initiative, a prominent climate action group, sparked an internal staff revolt and the resignation of an SBTi adviser last month by saying that companies could use carbon credits to curb their Scope 3 emissions.
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