According to the chief technical officer at the Gold Standard Foundation, the carbon market is worth saving. However, it requires a significant shift in approach if it is to remain sustainable. The current system is based on a supply and demand model, where emissions are capped, and companies must purchase permits to emit carbon. However, the oversupply of permits has led to a collapse in prices, making it financially unviable for companies to invest in low-carbon technologies. Instead, they are incentivised to continue polluting, as it is more cost-effective.
To address this, the market needs to shift towards a more demand-driven model, where companies are required to reduce their emissions to meet targets. This would create a more stable price for carbon and encourage investment in low-carbon technologies. Additionally, there needs to be greater transparency in the market, with a focus on verifying emissions reductions and ensuring that they are credible and permanent. This would build greater trust among investors and encourage the development of new projects.
The Gold Standard Foundation is calling for a “2030 Gold Standard” that sets ambitious targets for emissions reductions and ensures that all projects are rigorously assessed and verified. This would provide a benchmark for companies to measure their progress against and ensure that emissions reductions are genuine. To support this, there need to be increased investments in renewable energy and other low-carbon technologies. This will require strong government policies that provide a clear regulatory framework and address market failures.
In conclusion, while the carbon market is worth saving, it requires a fundamental shift in approach if it is to remain sustainable. A more demand-driven model that incentivises companies to reduce their emissions is needed, along with greater transparency and verification of emissions reductions. Strong government policies and investments in low-carbon technologies are also necessary to support the transition to a low-carbon economy. The 2030 Gold Standard provides a framework for achieving these goals and creating a more sustainable future.