Fossil Fuel Companies and Brokers Expected to Benefit Most from ACMI

September 7, 2023

A report by climate and energy think tank Power Shift Africa suggests that fossil fuel companies and financial brokers may be the primary beneficiaries of the African Carbon Market Initiative (ACMI), which, seeks to create a carbon market where countries and companies can purchase carbon credits to offset emissions.

The report raises concerns about the ACMI’s potential to enable fossil fuel companies to increase emissions unchecked and highlights issues with the methodologies used to calculate emission reductions from carbon credit-producing projects. Additionally, it warns of land grabs and human rights concerns associated with some projects.

ACMI’s Ambitious Goals

The African Carbon Market Initiative’s ambitious goals of unlocking $6 billion in revenue and supporting 30 million jobs by 2030 signal its potential impact on the African continent. However, as the report indicates, achieving these objectives must not come at the expense of environmental integrity and human rights.

Voluntary Carbon Markets

The report sheds light on the challenges associated with voluntary carbon markets like ACMI. While these markets offer a mechanism for emissions offsetting, their lack of regulation can lead to various issues, including concerns about transparency, effectiveness, and environmental impact.

Concerns Over Emissions Increase

One of the most significant concerns raised by the report is the potential for ACMI to enable increased emissions, especially by private companies. Allowing companies to purchase carbon credits to offset their emissions may provide a loophole for them to continue polluting while appearing to take action on climate change.

Transparency and Brokers

The report highlights the role of financial brokers in the carbon market. Lack of transparency in transactions and mark-ups on carbon credits by brokers can result in a disconnect between the amount paid by companies seeking offsets and the actual funding directed toward mitigation activities.

Nature-Based Solutions

Projects such as tree planting and renewable energy schemes are essential components of carbon credit-producing projects. However, concerns about land grabs, human rights, and the permanence of carbon storage in nature-based solutions need to be carefully addressed.

Technological Solutions

ACMI’s consideration of direct air capture (DAC) technologies reflects an interest in innovative solutions. However, the report raises valid concerns about the viability, toxicity, and diversion of renewable energy resources associated with DAC.

The Role of Brokers and Large Companies

The report highlights the role of brokers in carbon credit transactions and notes that some large companies, including fossil fuel giants, engage in brokering credits, potentially benefiting from both emissions and offsets.

Need for Robust Governance

The findings underscore the need for robust governance, transparency, and accountability mechanisms within carbon markets. Establishing international standards and regulations for carbon credit markets can help address some of the concerns raised in the report.

« Previous Post Next Post »