Carbon offsetting could be worth £100bn, Carney claims

Carbon offsetting has come under fire from environmental campaigners but the former Bank governor predicts the market could grow to $150bn a year.

Charlie Conchie
Friday 15 October 2021 14:38
Former Bank of England governor Mark Carney says carbon offsetting will be crucial to achieving net-zero (Jonathan Brady/PA)
Former Bank of England governor Mark Carney says carbon offsetting will be crucial to achieving net-zero (Jonathan Brady/PA)

The carbon offsetting market could be worth 150 billion US dollars (£109 billion) a year but is being held back by “inconsistency” and “fragmentation”, according to a former governor of the Bank of England.

The controversial practice of carbon offsetting allows firms to drive down their overall carbon footprint by promising to spend cash on initiatives like reforestation, renewable energy infrastructure, and methane collection and combustion.

But Mark Carney claimed the growth of the offset market would be a crucial part of achieving net zero goals.

Speaking at the Sibos financial services conference on Thursday night, the UN special envoy and former Bank governor said its potential has been so far been hindered.

He said: “This market is only about one billion dollars (£730 million) a year and it’s fragmented, it’s inconsistent.

This is a 100 billion to 150 billion dollars-a-year market if we get it right, and the only way we get it right is if it's high integrity

Mark Carney

“This is a 100 billion to 150 billion dollars-a-year market if we get it right, and the only way we get it right is if it’s high integrity.”

Mr Carney acknowledged criticism that carbon offsetting is being used as a vehicle for “greenwashing”, where firms use offsetting projects to cover inaction.

He said: “Those who purchase the offsets need to be part of the solution. They can’t be buying ‘indulgences’ for instance.”

Adoption of carbon offsetting by firms like Microsoft would provide a boost to the market, Mr Carney said, as executives will enforce rigorous standards and monitoring on the delivery of these projects.

A new independent body was announced this year to regulate the practice of carbon offsetting amid fears that firms are using it as a get-out-of-jail-free card on carbon emissions.

But the plans drew backlash from environmental campaigners.

Charlie Kronick, senior climate campaigner at Greenpeace UK told the Guardian earlier this year: “This plan fails to get to grips with the real challenges of carbon credits – it’s a trader’s charter, written by and for the companies that want to buy and sell pollution, not cut it.”

Mr Carney came under fire again last week when 90 environmental groups placed adverts in the Financial Times and Toronto Star urging him to “stop greenwashing financial institutions that continue to invest in expanding fossil fuel infrastructure”.

The groups said the Glasgow Financial Alliance for Net Zero (GFANZ) set up by the former Bank governor does not require firms to submit detailed plans to reduce fossil fuel investments and does “not rule out reliance on discredited offsetting schemes and other unproven carbon dioxide removal technologies”.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in