Sustainability Community

There are very mixed reviews on carbon credits, are they good, are they bad?

The ones out there...are they actually legitimate. 

How much is a reasonably prices (reliable) carbon credit?

Are we better to not buy carbon credits, and put in place a 2050 net zero plan. Should we be buying carbon credits in the meantime to offset our emissions until we can reach a reasonable net zero plan?

The arguments and questions go on and on...

What are the questions you are facing? What are your views?

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Francesca Wheble
Responsible Investment Analyst
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Hi Francesca!

Thank you for raising such philosophical questions. I believe your reference is to voluntary carbon offsets, which, in my view, can serve as a valuable tool for reducing emissions in certain economic sectors, such as cement production, where low-carbon alternatives may be unavailable. Although I am not an expert in this field, I believe that regulators should create a list of economic activities without low carbon alternatives and, then, authorize companies to exclusively buy carbon offsets to counterbalance emissions arising from these particular economic activities. I am sure, we have experts in this topic among our community members. I am looking forward to hearing their opinion on carbon offsets.

Adding to our conversation, I would like to share an article on a relatively new product - transition credits. Transition credits are calculated as a difference between the emissions after retiring a coal plant and the emissions that would persist if the plant were still operational. The idea is to use transition credits as motivation for companies to close down environmentally harmful facilities. In other words, companies receive payment for discontinuing such unfriendly practices. The product sounds promising on paper. Let's see how it will evolve in reality. 

Transition Credits: https://www.bloomberg.com/news/articles/2024-03-02/hsbc-stanchart-explore-transition-credits-for-coal-clients?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTcwOTM4MzI2NCwiZXhwIjoxNzA5OTg4MDY0LCJhcnRpY2xlSWQiOiJTOUtOSzhUMEcxS1cwMCIsImJjb25uZWN0SWQiOiIzNzk5RTg1OENEOUQ0MEIzQkZCQjg3MDhDNkI0MDhBRSJ9.itpa1M54cAvHX_VyWgpzERpllOm7MijR9TLhYu4gfyc.

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Anastasia Kuznetsova
Associate Business Analyst
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