February 12, 2019
In 2015 in Paris, under the umbrella of the United Nations, nations of the world agreed to sign up a common text (the “Paris Agreement”) which commits them to take relevant action with the aim of very rapidly peaking global GHG emissions, then reducing them sharply, and eventually reaching global carbon neutrality by the second half of the century. This very ambitious decarbonisation pathway follows what is recommended by the scientists of the Intergovernmental Panel on Climate Change (IPCC), if the world wants to get a reasonable chance to keep global warming under the 2°C threshold above pre-industrial levels – beyond that limit, IPCC warns that tipping points and retroactive effects may very likely cause the global warming to race out of control and hence bring catastrophic impacts to the economy and the communities.
Alas, global GHG emissions fall short from following these figures. After decades and decades of continuous increase, global GHG emissions have been flat in 2014-15-16, three years where the climate community has hoped to see the long-waited decoupling effect between global GDP and global GHG emissions; but 2017 figures have brought strong disappointment with a new increase of almost 2% – while a reduction of almost 3% per year will be needed up to 2050 to meet the IPCC recommendations. Many different factors bring their contribution to this new rise, but the key driver is definitely the Chinese economy which doesn’t manage to control its GHG emissions despite a robust and ambitious roadmap driven by the government.
On top of that, there is a general consensus that the decarbonisation pledges agreed to by all signatory countries of the Paris Agreement are also not ambitious enough to respect the 2°C pathway. Should they be strictly respected – which is very unlikely, these national reduction action plans would raise the global annual GHG emissions to between 52 and 59 Gt CO2e in 2030 whereas they should be between 40 and 45 Gt CO2e by that time to keep a reasonable chance to limit global warming under dangerous threshold. More ambitious action will definitely be needed to fill that significant and crucial gap.
Hence, in a nutshell, while the global economy has to shift to a low carbon model, today more rapidly than yesterday and tomorrow more rapidly than today, the global GHG emissions remain out of control and will deliver, should no strong action be urgently taken, dangerous global warming and very harmful climate impacts.
In this context, there is a general consensus that GHG reduction initiatives have to be developed at a very large scale and by any reasonable means; and that carbon offset markets are obviously part of the solution. Indeed, the carbon offset markets help organisations act beyond their own scope and cut GHG emissions - especially in low income countries where ambitious action is needed to “leapfrog” to low carbon model while avoiding building the economy on the extensive use of fossil fuels.
The Paris Agreement does recognise the role of carbon offsets, covered by the wording “internationally transferred mitigation outcomes”, especially through its article 6 which states, inter alia, that “The use of internationally transferred mitigation outcomes to achieve nationally determined contributions under this Agreement shall be voluntary and authorized by participating Parties.” This article has been seen as very important as it recognises and extends the role of the CDM and JI mechanisms developed under the Kyoto Protocol and also de facto embeds voluntary offset initiatives on private markets in the UN climate agenda.