Analysis | Oil producers also want to sell you carbon indulgences – The Washington Post

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One of the world’s greenest countries is weeks away from becoming the first to sell UN-backed carbon credits. One of the world’s most promising frontier oil markets is planning a $9 billion expansion to become a major crude producer. Believe it or not, it’s the same nation.

Suriname – a densely forested former Dutch colony on the northern coast of South America – wants to commercialize both its hydrocarbons and the compensation needed to reverse their environmental damage. The fact that such a simultaneous proposal is being considered is a sign of the obsolescence of our carbon footprint calculation systems. If we want these rules to be fit for the 21st century, they will have to be reformed.

Suriname recorded a reduction of 4.8 million tonnes of carbon dioxide in 2021, thanks to the growth of forests which absorb more greenhouse gases than the country emits, Reuters reported last week. Around 30 companies are studying the possibility of buying them, according to the report.

At the same time, Patrick Pouyanné, CEO of TotalEnergies SE, met with President Chandrikapersad Santokhi to launch studies on an offshore oil field that could contain 700 million barrels of crude when it comes into production in 2028. Such a reserve could issue approximately 75 million barrels of crude. climate pollution is twice as much as forestry credits could absorb – almost eight times as much in a given year, at predicted production levels.

The proposals rely on two distinct flaws in international climate rules. The first is that fossil fuels are only counted where they are burned, not where they are produced. Australia likes to boast that its 437 million tonnes of domestic emissions are only about 1.1% of the global total – but that figure more than triples when you include the roughly billion tonnes that are released when its coal and gas exports find their place. path to a power station. Like Suriname, Australia is happy to make money selling fossil fuels to the world – it just doesn’t want to be held responsible for the damage they will cause.

The second gap is that carbon credit verification is a confusing jumble of standards and frameworks that have become riddled with dubious assumptions. The compensation proposed by Suriname is not based on planting new forests, but on refraining from cutting down existing ones – what are called REDD+ credits. This system has come under heavy criticism over the past year after the Guardian newspaper reported that deforestation was generally no slower than in other regions, which would mean the credits were largely part wrong. A paper published in the journal Science last month found that only 6.2% of offsets from REDD+ projects examined actually generated emissions reductions.

Suriname is not alone in having contradictory ambitions. Of the six countries that have already certified that they have met their net-zero emissions targets, three are, or aspire to become, major oil producers.(1) Neighboring Guyana saw the fastest pace of economic growth last year fastest in the world, after the bankruptcy of ExxonMobil Corp. The consortium led by this consortium began production in 2019. Its offshore fields contain around 11 billion barrels of oil equivalent, similar to the reserves of Norway, Algeria or Brazil. Hess Corp., Exxon’s junior partner in the project, purchased $750 million worth of carbon credits last year to preserve Guyana’s forests.

Across the Atlantic, Gabon – a longtime oil producer that joined the Organization of the Petroleum Exporting Countries in 1975 – in 2019 became the first country in Africa to receive payments from a separate anti-deforestation program supported by the UN. Plans to issue the largest ever tranche of carbon credits could be put on hold due to last month’s military coup. Mozambique, which is striving to become one of the world’s largest gas exporters, was the first to receive REDD+ payments in 2021 from another program, this one funded by the World Bank.(2)

The REDD+ system has attracted criticism because the avoided deforestation on which it relies depends on comparing forest cover with a counterfactual scenario of what might have happened if carbon credits had not been sold. It is much more expensive to plant a new forest than not to cut down an existing forest. Without rigorous verification, such programs are little better than greenwashing.

This will be particularly the case in small countries like Suriname, Guyana and Gabon. Economic activity will naturally shift away from low value-added, land-intensive industries like logging, rice, sugar and palm oil when a huge offshore oil deposit is discovered. This does not make the decline in deforestation a real asset in the global carbon footprint.

The governments of these countries can hardly be blamed for finding ways to exploit the messiness of the climate rules we have in place. Developing economies need every penny of foreign revenue they can get, whether from oil sales or carbon offsets. The rest of the world does not have to follow this charade, however.

If we want the planet’s natural environments to play a role in our path to carbon neutrality, we will need to find ways to close these gaps in carbon accounting rules and give more credibility to the process. The medieval Catholic Church showed its moral bankruptcy when it began selling indulgences to sinners in order to buy absolution for their misdeeds. Much like this system, the carbon offset industry is in dire need of reform.

Read more from Bloomberg’s opinion:

Why not all carbon credits are created equal: Lara Williams

The carbon offset market unfortunately continues to grow: Mark Gongloff

Domino effect in Africa, embarrassment in Paris: Lionel Laurent

(1) These six countries are Benin, Bhutan, Comoros, Gabon, Guyana and Suriname.

(2) Another of the six net-zero countries, Comoros, is adjacent to Mozambique’s offshore gas fields and has sought to exploit them without success.

This column does not necessarily reflect the views of the editorial board or Bloomberg LP and its owners.

David Fickling is a Bloomberg Opinion columnist covering energy and commodities. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times.

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