In response to the Energy Transition Accelerator announcement made by the U.S. State Department, The Rockefeller Foundation, and the Bezos Earth Fund today at COP28, Abby Maxman, President and CEO of Oxfam America, said:
“While motivated by the right intentions, this initiative risks not only enabling companies to purchase carbon offsets instead of taking sufficient steps to reduce their emissions —it also puts a U.S. government seal of approval on it.
“We are also particularly concerned that the Energy Transition Accelerator would allow the use of a watered-down standard that enables companies to buy offsets for half of the emissions for which they are indirectly responsible. Instead, companies should be taking rapid steps to phase out all of these emissions.”
“Given the urgency of the climate crisis, it is essential to focus attention on the need for adequate international public climate finance for the energy transition. The carbon offsets market is worth only $2 billion globally, and is facing increased skepticism about whether it actually leads to emissions reductions. There are also concerns about the social harms that offsets cause and whether companies can credibly rely on them.
“Even the boldest projections about the carbon offsets market still fall far short of the $1.64 trillion needed each year for a just energy transition in low- and middle-income countries. At least half of the amount will need to come from public finance, with the large majority provided through grants and concessional funding by Global North countries.”
“Recent investigations in offset schemes around the world reveal real risks of land grabs, lack of robust community consultation, and failure to ensure that project benefits are shared with frontline communities. The Energy Transition Accelerator must ensure that it applies the highest social and environmental safeguards, reflecting international human rights and environmental law, in the scoping, development, and implementation of carbon projects.”
/ENDS
Notes to editors:
- The U.S. State Department, The Rockefeller Foundation, and the Bezos Earth Fund unveiled the core framework for the Energy Transition Accelerator, which aims to help participating low- and middle-income countries speed their electricity sector transition from fossil fuels to clean power by attracting investments from companies that would in return receive carbon credits for the emissions avoided.
- The ETA allows use of the watered-down Voluntary Carbon Markets Initiative Scope 3 Flexibility Claim, which allows companies to buy offsets for 50% of Scope 3 emissions – emissions a company is indirectly responsible for, such as from the products they buy from suppliers and from its products when their customers use them. This potentially undermines progress on the higher bar being advanced by the Net Zero Standard of the Science-Based Targets Initiative.
- Bold projections about the offsets market estimate that it may grow to $10-50 billion by 2030. This is still far short of the U.S. $1.64 trillion each year needed by 2030 for a just energy transition in low- and middle-income countries.