The Biden administration released new rules Tuesday designed to improve the “integrity” of a popular type of green financial product.
The nonbinding guidance is meant to introduce or enhance standards for carbon credits, which are popular products because they give corporations a way to offset the emissions footprint of their operations without making sweeping and costly changes to the way they operate. Proponents of carbon offset credits tout them as a market-based climate solution, but critics say that they are too inconsistent to be trusted or are not effective enough to actually address climate change.
The guidance urges prospective credit buyers to make their own efforts to cut emissions in their own supply chains and operations, but it also lays out steps for certifiers and purchasers to increase transparency and the accuracy of their reporting.
“Voluntary carbon markets can help unlock the power of private markets to reduce emissions, but that can only happen if we address significant existing challenges,” Treasury Secretary Janet Yellen said in a statement. “The principles released today are an important step toward building high-integrity voluntary carbon markets. This is part of the Biden administration’s ambitious efforts to tackle the climate crisis and accelerate a clean energy transition that benefits all Americans.”
The Biden administration considers carbon offsets to be an important tool for bringing down overall emissions, but also acknowledged the need to make the products more reliable and trustworthy for would-be buyers, according to the press release. Corporations and individual buyers voluntarily purchased about $1.7 billion worth of credits in 2023, according to The New York Times. (RELATED: Green Firm That Advised SEC On Proposed Emissions Rule Sold Carbon Credits From Chinese Region Known For Slave Labor)
WATCH: @SenJohnKennedy Destroys Dep. Energy Secretary – Exposes Climate Change Fraud By Asking One Question
KENNEDY: “If we spent $50 trillion to become carbon neutral…How much is that going to reduce world temperatures?”
SEC TURK: “This is a global problem.”
KENNEDY: “You… pic.twitter.com/eja5PJzM00
— Daily Caller (@DailyCaller) May 4, 2023
A growing number of analyses and studies have found that carbon offset credits are ineffective or hollow products, and many environmentalists deride them because they do not address sources of emissions, according to the NYT. Critics of the administration’s new guidelines charge that they are too vague and unenforceable to adequately address all of the ineffective offsets on the market.
“There are credible estimates that the voluntary carbon market could grow to 10 or 20 times what it is today, and then you’d be talking about real money to tackle climate change,” Nat Keohane, president of the Center for Climate and Energy Solutions, an organization that is in favor of carbon credits, told the NYT. “But we’re not going to get to that scale unless buyers have confidence in what they’re buying.”
The Treasury Department did not respond immediately to a request for comment.
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