The carbon offsetting market could be worth 150 billion US dollars (109 billion pounds sterling) per year but is held back by “inconsistency” and “fragmentation”, according to a former governor of the Bank of England.
The controversial practice of carbon offsetting allows companies to reduce their overall carbon footprint by promising to spend money on initiatives such as reforestation, renewable energy infrastructure, and methane collection and combustion.
But Mark Carney said growing the offsetting market would be critical to meeting the net zero goals.
Speaking at Sibos’ financial services conference on Thursday evening, the UN special envoy and former bank governor said his potential has so far been hampered.
He said: ‘This market is only about $ 1 billion (Â£ 730million) a year and it’s fragmented, it’s inconsistent.
“It’s a $ 100 billion to $ 150 billion a year market if we do it right, and the only way to do it right is to do it with great integrity.”
Mr Carney acknowledged criticism that carbon offsetting is used as a vehicle for âgreenwashing,â where companies use offset projects to cover up inaction.
He said: âThose who buy the offsets have to be part of the solution. They can’t buy âindulgencesâ, for example.
The adoption of carbon offsets by companies like Microsoft would give the market a boost, Carney said, as executives will apply rigorous standards and control over the completion of these projects.
A new independent body was announced this year to regulate the practice of carbon offsetting, fearing that companies would use it as a carbon-free jail release card.
But the plans have prompted a reaction from environmental activists.
Charlie Kronick, senior climate activist at Greenpeace UK, told the Guardian earlier this year: Pollution, not cut it.
Mr Carney came under fire again last week when 90 environmental groups ran ads in the Financial Times and Toronto Star urging him to “stop greenwashing financial institutions that continue to invest in money. expansion of fossil fuel infrastructure “.
The groups said the Glasgow Financial Alliance for Net Zero (GFANZ) created by the Bank’s former governor does not require companies to submit detailed plans to cut fossil fuel investment and “rule out not the use of discredited offset programs and other unproven carbon dioxide removals. technologies “.