- This is according to the claims code of practice developed by Voluntary Carbon Markets Integrity.
- Today, thousands of companies are making climate commitments, such as reducing emissions to certain levels by specific dates
Companies polluting the environment have been urged to maintain and publicly disclose an annual greenhouse gas emissions inventory.
They must also set and publicly disclose validated science-based near-term emissions reduction targets, and publicly commit to reaching net zero emissions no later than 2050.
This is according to the claims code of practice developed by Voluntary Carbon Markets Integrity.
“Many stakeholders are concerned that the use of carbon credits could hinder, delay, or replace efforts by companies to reduce greenhouse gas emissions within their operations and supply chains,” parts of the code reads.
The code says without clear and transparent guidance about the voluntary use of carbon credits for underpinning credible claims, investors and consumers are not able to effectively allocate capital and direct their purchasing power to incentivise real company leadership on climate mitigation.
Many also make claims about ‘carbon neutral’ operations, products and services.
However, there is a lack of clarity about what these commitments and claims mean.
There is often insufficient transparency about corporate climate performance and inconsistent use of terminology.
These shortcomings risk undermining confidence in the integrity of voluntary carbon markets and in corporate commitments more broadly, even when commitments are genuine.
The carbon market is a system for buying and selling carbon credits, which are instruments that allow companies, governments, and other organisations to address their greenhouse gas emissions by funding projects that reduce or remove carbon dioxide from the atmosphere.
Voluntary carbon markets have the potential to help fill gaps in financing for climate mitigation, enhance corporate efforts to transition to Net Zero and support the achievement of countries’ Nationally Determined Contributions and sustainable development objectives.
They can also support and accelerate the introduction of robust, well-designed climate policies.
However, this potential can only be realised if voluntary carbon markets operate with high integrity.
The primary purposes of the VCMI Claims Code are twofold.
They provide clear requirements, recommendations and supporting guidance to companies and other non-state actors on when they can credibly make voluntary use of carbon credits as part of their near-term emissions reduction objectives and long-term net-zero commitments and provide guidance on the associated claims they can make regarding the use of those carbon credits.
All stakeholders need to ensure that their use of carbon credits accelerates—rather than undermine their contribution to global climate action.
Today, thousands of companies are making climate commitments, such as reducing emissions to certain levels by specific dates and decarbonising their supply chains.
Voluntary carbon credit markets have benefits.
It is not subject to the guidelines and rules of the Clean Development Mechanism which means it is easier and cheaper to implement projects.
However, this also means that it lacks accountability and is therefore prone to greater abuse.
Experts also feel that the introduction of carbon trading schemes has arguably not transferred finance or technology to Africa.
Also, Kenya’s carbon market presence remains small by global standards limiting its overall economic growth.
Some of the Clean Development Mechanism that has been rolled out by KenGen includes Ngong Wind farm (5.1MW), Olkaria I unit 4 & 5 (150.52MW), Olkaria IV (149.548MW), Optimization of Kiambere (24 MW), Tana Power Plant (20MW) and Olkaria II 3rd (35 MW).
The objective of the projects is to reduce greenhouse gas emissions and ensure sustainable development.
KenGen said Olkaria II geothermal expansion project which was registered on December 4, 2010, has helped to offset 78,640 tonnes of carbon dioxide (CO2) equivalent(e) annually.
The company said the redevelopment of Tana Hydro Power Station which was registered on October 11, 2011, has helped to offset an estimated 25,680 tonnes of carbon dioxide equivalent (e) annually.
The optimisation of Kiambere Hydropower project registered on December 28, 2012, has helped offset 41,204 tonnes of carbon dioxide equivalent (e) annually.
KenGen said Olkaria I Units 4 &5 registered December 28, 2012, has offset 628, 451 while Olkaria IV geothermal has helped offset 651,349 tonnes of carbon dioxide equivalent (e) annually.
Ngong Phase 1 registered May 19, 2014, has helped offset 9,941 tonnes of carbon dioxide equivalent (e) annually.
KenGen said it has availed five million carbon credits to date, getting additional revenue totaling $3.6 million with 10 per cent dedicated to community projects.
Carbon credits are being explored by countries as one way of addressing the impacts brought about by climate change and are provided for under the Paris Agreement.
The Paris Agreement is a legally binding international treaty on climate change.
It was adopted by 196 Parties at the UN Climate Change Conference (COP21) in Paris, France, on December 12, 2015.
The agreement entered into force on November 4, 2016.
Its overarching goal is to hold “the increase in the global average temperature to well below 2°C above pre-industrial levels” and pursue efforts “to limit the temperature increase to 1.5°C above pre-industrial levels.”
To gain maximum benefits from carbon credits, the Kenyan government is in the process of amending the Climate Change Act to enable the country to tap into the multi-billion sector industry of the Carbon Market.
The state is seeking to create a national registry to show who is trading where and how much and also ensure local communities benefit.
