Wednesday, May 25

Offsets are used in Colombia to avoid carbon taxes: report | Atmosphere

Polluters have used forest protection carbon offsets that may not have any benefit for the climate to avoid paying carbon taxes in Colombia, according to a report.

In 2016, a tax of around $ 5 (£ 3.60) was introduced in the South American country to cover the use of some fossil fuels. However, companies that emit carbon dioxide can avoid paying the tax by purchasing carbon offsets from Colombian emissions reduction projects, including those that conserve threatened natural carbon banks such as peatlands, forests and mangroves.

According to the report, a new analysis of large-scale forest protection schemes in the Colombian Amazon by Carbon Market Watch claims that they may be drastically exaggerating their impact on preventing deforestation. The report warns that millions of carbon credits have likely been generated with no benefit to the climate.

He finds that the issue of “hot air” carbon credits from Colombia’s forest protection schemes could be the “tip of the iceberg,” with 75 similar projects authorized to sell credits under the country’s internal tax system.

Around 5 million credits have been purchased from the projects considered in the report, almost all by Primax Colombia SAS, a fossil fuel company covered by the carbon tax. This would represent a loss of some 25 million dollars for the government, according to the report, which has been published as part of an investigation with the Latin American Center for Investigative Journalism (CLIP).

Carbon Market Watch, an accredited observer to the UN climate negotiations, has asked Verra, an American non-profit organization that administers the world’s leading carbon credit standard used by one of the projects analyzed in the report, to suspend the scheme from your registry.

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The analysis comes amid growing concern about the environmental integrity of emission reductions from Verra-approved forest protection schemes, often used by major polluters to substantiate “net zero” and “carbon neutral” claims. .

Last month, an investigation by The Guardian and Unearthed, Greenpeace’s investigative journalism unit, into 10 schemes approved by Verra found that they face a significant credibility problem, with experts cautioning that the system is not fit for purpose.

Verra is in the process of reviewing its rules for its Redd + projects, but has thus far ruled out retrospectively canceling credits that have already been approved.

Gilles Dufrasne, Policy Officer at Carbon Market Watch, said: “This scandal is another striking example that carbon market standards do not maintain the environmental integrity of offset projects. It damages the climate, reduces government revenues, and threatens the continuation of climate finance payments from international donors. We hear time and again that the voluntary carbon market helps countries go beyond their existing climate commitment, but in this case it has undermined national efforts. “

Forest protection schemes, known as Redd + (reduced emissions from deforestation and forest degradation), generate credits by preventing environmental destruction against a baseline often based on historical losses.

Concerns that the projects were producing “hot air” credits by exaggerating their environmental impact through the use of dramatic deforestation baselines have long dogged Redd + projects and in 2018, the Ministry of the Environment of Colombia introduced rules that require schemes to comply with a national baseline development by the government, known as a reference forest emission level (NREF).

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The report said that some schemes are not using the national baseline and are claiming credits against a much higher deforestation scenario, probably producing credits of little benefit to the climate. While more funding is needed for forest conservation, Carbon Market Watch said it could not be obtained at the expense of environmental integrity.

Verra said the analysis was methodologically flawed. A spokesperson said: “It compares the project’s baseline with the country’s Reference Forest Emission Level (FREL), but the assessment of Colombia’s FREL by the UNFCCC has not yet been finalized and, in any case, a NREF represents an average across a country or region and is not site specific.

“Verra emphasizes that all VCS projects follow approved methodologies and are validated by independent external auditors. These auditors also verify all emission reductions and eliminations ”.

In response to the report, Colombia’s Environment Ministry said it was developing a strategy to strengthen the integrity of the current system by improving the environmental credibility of the carbon market and the governance of the carbon tax exemption mechanism, among other measures.

Primax Colombia did not respond to a request for comment.

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