Carbon offset projects
January 19, 2021
Shortly before his inauguration as the next president of the United States, Joe Biden announced that the USA would be re-joining the Paris Climate Agreement once he will be in office – a clear sign of a turnaround in American climate policy. What can we expect from this new direction, and what is the significance of the Paris Climate Agreement for global climate action from 2021 onwards?
A Climate Action Insight from Dr. Sascha Lafeld, Head of Carbon Offset & Green Energy Services.
With the Paris Climate Agreement, the international community established a framework of measures and targets to mitigate climate change. The agreement aims to limit global warming to well below 2°C – ideally to 1.5°C – and to support the Global South to adapt to the consequences of climate change. The agreement also commits all countries to reduce their greenhouse gas emissions from 2020 onwards.
In the EU, this obligation has already been made legally binding through the Climate Law dated mid-December 2020. Accordingly, Europe is aiming to achieve a 55% reduction in emissions by 2030 and full climate neutrality by 2050.
In this respect, the economy, and manufacturing businesses in particular, have an important role to play: they are required to achieve the majority of the emissions reductions. Many are already taking this responsibility seriously. They are calculating, reducing and offsetting their carbon footprint on a continuous basis, thereby making themselves fit for future legal requirements.
Businesses aren’t waiting for politics
But in the USA, too, a number of companies have being leading the way on climate action despite the absence of supportive politics. In this respect, a majority envisage climate neutrality to form a key part of a sustainable corporate strategy and increasing numbers of US companies are setting themselves net-zero targets. As of writing, almost 250 have committed to or set Science-Based Targets, with the goal of aligning their measures and targets to the carbon offsetting provisions stipulated in the Paris Agreement. This includes major corporations such as Microsoft, Pepsi and Facebook.
There can be no doubt that the Paris Agreement has been and shall remain a global milestone for the worlds of both politics and business. It unites the global community behind the goal of limiting global warming and has defined respective targets to which businesses should orient themselves. The fact the world’s leading economy is re-entering this historic agreement, provides it once more with the credibility and weight that it once had.
Kamala Harris’ strategy: will the USA become a leader in climate action?
The USA’s nationally determined contribution (NDC) to and its place within the Paris Agreement will need to be renegotiated as previous targets became null when the US originally exited the agreement. On the one hand, this has caused uncertainty, but it is also an opportunity for the Americans to play a leading role in international carbon offsetting. In the coming years we expect to see proposals for carbon taxation as well as mandatory carbon disclosures for businesses and investors. In fact, during the pre-election campaign, Vice President-elect Kamala Harris announced that she wanted to completely decarbonise the US by 2045. During the election campaign, she also proposed an international ban on fossil fuel trading. These proposals are certainly important and welcome measures that could provide the basis for a new leadership role by the USA.
ClimatePartner welcomes the fact that the new US government shall again play a key role in driving global climate action. We already work closely with a number of US headquartered businesses – including the World Bank and the Inter-American Development Bank – as well as through various partnerships. For instance, the Taskforce on Scaling Voluntary Carbon Markets, an initiative that aims to align and promote carbon offsetting, is gaining greater recognition and momentum.
In many ways, 2021 has started with a message of hope as well as one of urgency. The anticipated change in US climate policy will send a strong message to business and to the markets that the time to act has never been more important.