S1E121: Can carbon credit ratings bring peace of mind to a troubled market?

  • 21 Apr 2024

Carbon credit ratings can bring much needed transparency and accountability to the market – but is it enough to overcome years of mistrust?

Synopsis: Every first and third Sunday of the month, The Straits Times analyses the beat of the changing environment, from biodiversity conservation to climate change.

Depending on who you speak to, carbon credits hold great promise as a tool to achieve deep cuts in carbon emissions to fight climate change. Or they are a scam that fails to deliver what they promise. 

A major problem around the carbon credit market is trust and transparency – do carbon offset projects achieve what they pledge? How can we be sure? And will local communities benefit?

Ultimately, carbon credits should be treated like any other financial asset – they should be held up to scrutiny. And that means they should be rated for their quality and integrity, just like bonds. 

And increasingly that is what is happening. Several companies now offer ratings services for carbon credits to help buyers make better choices and meet due diligence requirements. But will this be enough to answer critics’ concerns about the carbon market?

To learn more about this, we speak to Mr Duncan van Bergen, co-founder of Calyx Global, a carbon credit ratings company based in Singapore.  

Highlights of conversation (click/tap above):

1:38 What are the main concerns about carbon credits?

4:04 How is trust being restored to the carbon credit market?

6:13 What does a high-quality carbon credit look like?

10:47 Your firm rates credits from projects from highest (A-rating) to lowest (E-rating). What percentage are at the highest rating and what types of projects are these?

14:40 What is the main worry about forestry projects?

20:54 What are the non-carbon benefits of carbon projects and why are they important?

Produced by: David Fogarty (dfogarty@sph.com.sg), Ernest Luis, Fa'izah Sani & Amirul Karim

Edited by: Hadyu Rahim

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