| After decades of trial, error, and adjustment, carbon markets were finally beginning to deliver on their potential when they collapsed in a storm of controversy in 2023. Why did this happen? In part because, in tackling the wickedest problem in human history, carbon credits became entangled in a web of paradoxes – many of which we’ve collected at Carbon Paradox. Yet despite their flaws, carbon credits remain the only climate finance instrument ever to achieve significant scale. So the critical question is: Can carbon markets recover? We believe they can—but only if the fundamental paradigm and narrative shift. While researching our book, The Carbon Paradox, in conversations with countless stakeholder, we identified the need of a new shared framework; a foundation structure that helps all stakeholders agree on what carbon credits represent and how they fit into the broader fight against climate change. First, we believe that we need to move beyond the term “carbon credit.” What began as a term designed to differentiate payments for climate obligations from mere philanthropy stuck in the public mind as a “license to pollute.” We suggest “Climate Unit” instead—a term that emphasizes measurable progress towards a shared outcome, not absolution. But a name change is of course not enough. We also believe that technical fixes, while critical, will come to naught unless we re-anchor this instrument in the elemental forces that have always guided life—sky, animals, mountains, forest, and ocean—reminders of both our limits and our possibilities. As a new narrative, we thus propose the Five Elements: The Sky—Purpose and Vision: Climate Units must always serve the purpose of increasing climate ambition—not reducing it. The Animals—Complementarity: Climate Units are one climate solution among many. Various solutions, and various project types, must complement each other. The Mountains—Robustness: Robustness, transparency, and regulation must underpin each Climate Unit, aligned with Article 6 of the hashtag#ParisAgreement. The Forest—Wonder: Climate action shall inspire us, challenge us to innovate, to create, and to cooperate across all borders. The Ocean—Learning: Climate Units will never be perfect. They are riddled by underlying paradoxes, some of which will always remain. The Five Elements are not a technical manual but a tool for discussion: a way of expressing, clearly and inclusively, what we are all trying to achieve through climate action, and then through Climate Units. They are not final answers, but food for thought—please share your view! Discuss with Renat on LinkedIn. |
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