The United States wants to set up a system for buying and selling carbon credits as a way to help low-income countries pay for the transition away from fossil fuels.
Under the Energy Transition Accelerator, companies would buy credits from developing nations that are cutting their greenhouse gas emissions. A carbon credit represents a set amount of emissions that were reduced or removed from the atmosphere. Companies buy credits to offset their own emissions.
Details of the State Department plan are still being worked out, but it appears countries would generate credits by cutting emissions in their power sectors through the retirement of fossil fuel infrastructure like coal plants and the addition of renewable energy. Countries would then be able to sell the credits to companies. Those transactions would create a reliable source of money for low-income countries, which they could use to obtain additional private funding on favorable terms, the U.S. State Department said in a statement.
Critics say carbon markets — the places where carbon credits are bought and sold — often fail to deliver climate benefits. Many climate advocates say low-income countries need to get money directly in the form of grants that don't further strain their national budgets.
"Carbon offsets are not an answer in a world already on fire, under water and facing mounting climate losses and damage," said Rachel Cleetus of the Union of Concerned Scientists.
Now that most world leaders have made their opening statements, it's time to get down to business. But there appears to be little agreement about who will pay for the immense damage that climate change is causing, especially in developing countries. Wealthy countries, whose pollution has contributed the most to climate change, have agreed to discuss creating a loss and damage fund for developing countries at these talks, but an official decision could still be years away.
Tens of millions of people were affected by climate-driven floods in Pakistan earlier this year. The country's climate minister Sherry Rehman said the cost is at least $30 billion – an astronomical sum that Pakistan cannot afford.
Rehman and other delegates from around the world were theoretically supposed to keep their comments today to just a 2-minute opening statement. But Rehman spoke for much longer, arguing that countries must agree to at least talk about loss and damage funding.
"If we delay," Rehman said as one of the organizers interrupted to tell her that her time had expired. "Yes," she responded, "times up. Times up for everything, frankly."
"[If we delay] putting loss and damage on an actionable agenda with a framework," she continued, "then the signal we're sending each other and the rest of the world is that vulnerability is a death sentence."
Watch Rehman's full remarks here, starting at about 1:37:15.
A handful of countries have announced new funding to support loss and damage in recent days. New Zealand is putting up $20 million and Austria offered 50 million euros. Germany and Denmark also announced more than 170 million euros for the "Global Shield," a new fund that would provide disaster assistance and climate insurance to developing countries.
Still, only half a dozen countries have made such commitments so far, and official negotiations over loss and damage are likely to be heated in the week ahead.
The website is called Climate Trace, and it shows the exact sources of greenhouse gas emissions worldwide.
The inventory is based on measurements from satellites, and sensors on land and on airplanes and ships. That's important because much of the self-reported data from industry about carbon dioxide and especially about methane pollution is notoriously unreliable.
The new website shows that power plants and oil and gas fields are by far the biggest sources of emissions worldwide. For example, 26 of the 50 largest sources of greenhouse gas emissions are oil and gas operations.
Methane – the predominant ingredient in natural gas – is a particularly big problem, because it's an incredibly potent greenhouse gas. It traps a ton of heat in the atmosphere. Oil and gas operations in the U.S. underreport how much methane they release, recent research suggests.
The new website shows that there are oil and gas emissions hotspots in the U.S., Russia and the Middle East. You can browse the map yourself here.
The goal of the new website is to publicize where planet-warming emissions come from, and make it harder for governments and companies to make vague promises to reduce those emissions.
The U.S. Development Finance Corporation (DFC), which works with investors in the private sector to get money to low-income nations, says it's trying to boost investments to help countries deal with the impacts they're already feeling from climate change.
According to the United Nations, industrialized countries gave developing nations around $29 billion in financing in 2020 to help them prepare for more extreme storms, heat waves and floods. But that's just a fraction of what the developing world needs in order to reduce the damage from extreme weather events, the report says.
The Development Finance Corp. says it's looking to support small- and medium-sized businesses that have plans to improve climate adaptation in the areas of agriculture, water, infrastructure and health.
"DFC committed more than $390 million for climate adaptation projects during the last fiscal year. We want to expand our work and help those most impacted by acting as a catalyst for private investment in developing countries," the agency's CEO, Scott Nathan, said in a press release.
Nathan also signed a retainer letter with Scatec, a renewable energy company, to consider funding for a new hydrogen project in Egypt that would run on clean energy.