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Can humanity change the CODE RED to a CODE GREEN through carbon credits?

In recent years, the effects of climate change are intensifying and becoming unpredictable, many of these effects are even irreversible. Climate change is real and its widespread effects are found everywhere. From 2019 Amazon rain forest wildfires to the ongoing global pandemic of COVID-19 are direct or indirect results of our extreme exploitation of natural resources. The Intergovernmental Panel on Climate Change (IPCC)’s sixth assessment report sets out "it is unequivocal that human influence has warmed the atmosphere, oceans, and land". The physical science of climate change and its impacts pinpoints humanity’s role in driving extreme weather events with more accuracy and certainty than ever before. The increase of greenhouse gases (GHGs) concentration, rise of sea levels, glacier retreats, heat waves, heavy rainfall and drought are some of the effects and aftermath of human influence. The report warns that these effects will continue to escalate and suggests that some irreversible changes have already happened, while others are on the horizon. The report is a “code red for humanity", says the UN chief. But scientists in the IPCC say a catastrophe can be avoided if the world acts fast.

In 2015, the Paris Climate Agreement was negotiated by 196 parties at the 2015 United Nations Climate Change Conference near Paris, France. This pact aims to limit the rise of global temperatures well below 2°C this century and pursue to maintain it under 1.5°C. The IPCC’s sixth assessment report sets out that under all the emissions scenarios considered by the scientists, both targets will be broken this century unless huge carbon cuts take place. Unless we don’t take immediate, large-scale and rapid reductions in GHG emissions, limiting warming to 1.5 degrees Celsius will be beyond reach.

During an Ocean Purpose Project clubhouse meeting on the 26th of August, we had discussed the topic of using nature’s resources without fully considering the value that they hold. From our coastal mangroves to even a small mussel, we may not truly recognise their value.

For example, mangroves provide a number of valuable ecosystem services that contribute to human wellbeing, including provisioning (e.g., timber, fuelwood, and charcoal), regulating (e.g., flood, storm and erosion control; prevention of saltwater intrusion), habitat (e.g., breeding, spawning and nursery habitat for commercial fish species; biodiversity), and cultural services (e.g., recreation, aesthetic, non-use) (Spaninks and Beukering, 1997, UNEP, 2006, TEEB, 2010). Mussels have been described as the “livers of our rivers” as they remove algae, sediment, nutrients, harmful bacteria, and metals from rivers and lakes. This shows how important they are and therefore we have a responsibility to study, understand and preserve them for our future generations.

The Native American proverb above serves as a reminder to ourselves that the earth we are on is not inherited but we borrow it from our children and therefore it’s about time we take measures to protect it. Source: AZ Quotes

Introduction of Carbon Credits

The United Nations Framework Convention on Climate Change (UNFCCC) was established in the year 1992 and this came in to combat this dangerous human interference with the climate system. The Kyoto protocol (superseded later by the Paris agreement) was the first implementation of measures under the UNFCCC. Under this protocol came the Clean Development Mechanism (CDM) which allowed emission-reduction projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one tonne of CO2. These CERs can be traded and sold, and used by industrialized countries to meet a part of their emission reduction targets. These credits are a way of reducing GHGs such as CO2 and is playing a crucial role in fighting climate change. With the ongoing climatic emergency, these Carbon finance mechanisms have become the talking point among a wide range of industries around the world. New York-based Xpansiv CBL‘s year-to-date carbon volume of more than 30 million tons of CO2 traded emissions was already approaching 2020's full-year record of 31 million tons. Among the 2021 new entrants in voluntary carbon markets, oil and gas majors, hedge funds, and banks were heard as the most active players, resolutely taking positions in the market. These credits are traded in a market-based system that aims to provide incentives for businesses to reduce their environmental footprint. Carbon trading is a legally binding scheme that caps total emissions and allows organizations to trade their allocations.

A different form of carbon credit is the Voluntary carbon offsets where consumers can choose to pay a company to balance out their carbon footprint such as funding projects which absorb CO2. Voluntary carbon markets allow carbon emitters to offset their unavoidable emissions by purchasing carbon credits emitted by projects targeted at removing or reducing GHG from the atmosphere. Companies can participate in the voluntary carbon market either individually or as part of an industry-wide scheme. While compliance markets are currently limited to carbon credits from a specific region, voluntary carbon credits are significantly more fluid, unrestrained by boundaries set by nation-states or political unions. They also have the potential to be accessed by every sector of the economy instead of a limited number of industries.

Last May we heard about the Court's orders to the Royal Dutch Shell to cut carbon emissions by 45% by 2030 to align with the Paris agreement. With heavy human dependencies on petroleum products, reducing emissions will not be immediately possible. To comply with regulatory burden in the short-term these industries can rely on these carbon credits through which they will be able to promote environmentally sustainable projects which focus on absorbing the GHG emissions. In the long run, the introduction of voluntary carbon offsets financially encourages industries to reduce GHG emissions or develop innovations to produce these products without heavy GHG emissions.

Carbon Offset Standards

There are many companies like Bluesource and Verra which develop environmental sustainable projects and register them as adhering to one of several carbon offset standards. Each standard has a particular set of rules or “protocols” that sets out how carbon credits will be assigned to different types of projects based on various criteria. Standards can be government agencies (in the case of compliance markets) or non-profit organizations (which provide services for both compliance and voluntary markets). Some examples of private Standards are the Climate Action Reserve, American Carbon Registry (managed by Winrock), and the Verified Carbon Standard (managed by Verra). The organizations behind the standards generate fees from managing the certifications of projects as well as handling the logistics of issuing and retiring credits.

This financial mechanism is fast evolving as days go by but one thing we should always keep in mind is when we voluntarily buy carbon credits we should understand how these carbon credits are made and not consider them as mere commodities. As not all intentions of selling carbon credits lead to conserving and protecting the environment. We shouldn’t just focus on the transactions of tons of CO2 equivalent, we need to think more about moral and ecological issues, and we need to recognise that solving the climate crisis is much more about social and environmental justice than it is about tons of carbon. Therefore by carbon credits finance mechanism and with proper analysis and study of the environmental problems we can turn the current climate crisis to Code Green.

The Ocean Purpose Project (OPP) is also working to develop sustainable projects to fight climate change. We firmly believe in driving projects using sustainable innovations and technologies to play our part in the fight against climate change. OPP is working towards developing and attaining carbon credit certification for methodologies in carbon sequestration through our projects. One of such projects is our bioremediation and bioplastic project, where we endeavour to support the Kelong farming community of Pasir Ris who have lost Up to 600 tonnes of fish to algal bloom this year through the use of native seaweed and mussel culture. By developing and adopting methodologies geared towards attaining carbon credits, we believe we can make a difference starting with the lives of our local fish farmers in Singapore and thereby play an active role in combating climate change while striving to heal our oceans.

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