Mitsui of Japan investing in Cambodian reserve . . .
The Japanese firm Mitsui & Co is dramatically increasing its investment in conservation in Cambodia’s Prey Lang nature reserve. Mitsui, like other corporations worldwide – including Microsoft, Shell, and other oil and gas companies – is investing heavily in forest conservation to earn credits they can sell on carbon markets. Forests offer a huge potential for carbon offsets as they are extremely efficient in absorbing carbon dioxide from the atmosphere. While investments in forest conservation are more important than ever, the challenge with carbon offset investments is that demand for forest conservation assets far outweighs the supply of current conservation projects.
A worldwide web of carbon markets . . .
Carbon pricing systems have been adopted broadly in national strategies to fight climate change. Under cap-and-trade systems, individual companies are compelled to buy emissions allowances if they surpass carbon emissions caps. Alternatively, they can purchase carbon offsets outside the scheme, on carbon markets, when such opportunities exist. Mitsui can benefit from carbon offset investments in Cambodia because of Tokyo’s unique carbon market, which, unlike most carbon markets, admits credits generated overseas, including in developing nations with which Japan has bilateral agreements. Such international carbon markets are rare but exist elsewhere. In Canada, for example, Quebec and Ontario have linked their emission trading systems (ETS) to California’s ETS. The EU-ETS also generates a carbon market covering 28 nations.
Meeting global commitments . . .
The COP25 is concluding today in Madrid, and Article 6 of the Paris Agreement was to be a major negotiating point. The article promotes voluntary international co-operation on reducing carbon emissions by creating new channels for climate finance, which would transfer the cost of global warming to the top polluting nations. UNEP’s “blue forest” is one such international co-operation initiative; it delivers forest conservation assets to carbon markets and helps partnering countries, including Indonesia and Thailand, fulfil their Paris Agreement commitments in the process. So far, that project has brought 1,500 additional hectares of mangrove forest to the carbon market.
- Nikkei Asian Review: Crisis credit: How the new carbon economy could save Asia's forests
- Modern Diplomacy: Greening the blue: Championing coastal climate solutions
- The New York Times: Factbox: Global schemes putting a price on carbon emissions