Nations clinched the Paris Agreement six years ago but finished writing it only at COP26 in Glasgow this month. There, negotiators finally checked the box on something called “Article 6,” a section of the 2015 climate pact governing how countries can trade credits to emit CO₂. The new standards should also impose structure and transparency on opaque voluntary markets where companies buy and sell carbon offsets.
This diplomatic breakthrough may build the confidence needed for billions of investment dollars to flow to recovery and conservation work, particularly in developing nations. But where should the money go? Demand is already high for projects that protect or restore land, generating offsets in the process. Credits that represent actual reductions in atmospheric CO₂ can’t come online fast enough — at least according to countries and companies hoping to buy their way, even partly, out of carbon debt. Use of offsets is dogged by an integrity problem and charges of greenwashing, ineffectiveness and local conflict.
Two recently released analyses suggest there is no shortage of help to protect land, regardless of whether help is direct government action, multinational funding or trustworthy carbon markets. The studies offer a useful way to think about the vast new world of what policy experts call “nature-based solutions.”
The first study offers a rigorously constructed map of the world’s most carbon-rich ecosystems, published in the journal Nature Sustainability. University and nonprofit researchers, led by the group Conservation International, have identified the places we absolutely can’t lose. Inspired by efforts to brand fossil-fuel reserves as “unburnable carbon,” the researchers define “irrecoverable carbon” as the forests, mangrove stands, peatlands and other areas that wouldn’t recover by 2050 if we wreck them. Half the world’s irrecoverable carbon is concentrated on 3.3% of the land, areas that together are equivalent in size to India and Mexico combined. It’s disappearing bit by bit every year, and holds 15 times the amount of CO₂ released in 2020.
The good news: New protections for 5.4% of this land would keep 75% of this carbon out of the atmosphere.
The map of high-carbon areas could be a useful resource for groups from biodiversity-focused activists to multilateral institutions like the World Bank. Companies that source raw material from forests should find it useful, the authors write, as they try to identify where they can stop underwriting destruction.
Well-constructed carbon markets can slow deforestation, channeling investment into areas where cutting trees has been the only development option. Allie Goldstein, Conservation International’s director for climate protection and a lead author, likened such investments to triage in a hospital emergency room that stabilizes the patient: Other programs can provide longer-term ecosystem care. “The map can give companies a clear vision where they should be investing,” she said.
There is a world of ecosystems in need of investments and ideas, such as the African Great Green Wall, a 5,000-mile band through the Sahel, from Senegal and Mauritania east to Ethiopia. The effort was begun in 2007 with the goal of restoring 100 million hectares (247 million acres) of land; so far, the initiative has completed just 4% of that total, according to a separate study in the same journal. Degraded land costs the region about $3 billion a year.
The authors tallied the value of goods produced in the region, such as crops and firewood, and of existing estimates of nonmarket benefits that ecosystems provide, like cleaning the air and water. They found that every dollar invested in restoration yields on average $1.20 in benefits. It’s not easy, though. Carbon markets in particular require stability and visibility uncommon in places where land ownership can change hands quickly and violence can disrupt life. Of the 28 million hectares accessible to Great Green Wall projects, half could be rendered inaccessible by violent conflict.
To date, carbon trading has not played a role in Great Green Wall projects, said Alisher Mirzabaev, lead author and senior researcher at the University of Bonn’s Center for Development Research. Funding to restore land has come from national budgets or international donors. The World Bank, France and the United Nations this year announced a $14 billion initiative to regreen the region.
“This paper, we hope, will be helpful in terms of targeting where to channel those investments,” Mirzabaev said. “We would like to guide those investments to the most efficient use.”
Eric Roston writes the Climate Report newsletter about the impact of global warming.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
