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Hedge Fund Climate Researcher Doubts Effectiveness of Carbon Credits

Hedge Fund Climate Researcher Doubts Effectiveness of Carbon Credits

Apr 22, 2024

Hedge Fund Climate Researcher Doubts Effectiveness of Carbon Credits

Mark Lewis, the head of climate research at Andurand Capital Management, expressed skepticism about the immediate future of carbon credits in an interview with Bloomberg. His comments come amidst controversy surrounding the world's top arbiter of corporate climate targets, the Science Based Targets initiative (SBTi), and its decision to allow controversial carbon credits to offset Scope 3 emissions. Scope 3 emissions, which are not owned or controlled by the reporting organization but occur within its supply chain, can constitute up to 90% of a company's total emissions, varying by industry.

On April 9, the SBTi announced a decision that permits companies to use offsets for their Scope 3 emissions. This has allowed wind farm companies and others to sell carbon offset credits to businesses seeking to offset their pollution, creating an uproar as it could be done without the sellers reducing their own emissions.

Lewis highlighted the risks and uncertainties that deter companies from heavily investing in carbon credits at this time. He underscored that while the SBTi's decision might be "bullish for the voluntary market," it does not necessarily translate to a rush of buyers entering the market.

Luiz Amaral, the chief executive of SBTi, has addressed the complexity of Scope 3 emissions, advocating for nuanced and "difficult" discussions to discern the most effective strategies. He emphasized that not all Scope 3 emissions are equal, indicating a more tailored approach to their management.

The article also touches upon the actions of multinationals such as Shell and Fortescue Metals Group, which have been reevaluating their carbon offset plans. Concerns over 'greenwashing' and the actual climate benefit of most credits have led some companies to shelve or reduce their investments in carbon offsets.

Bloomberg Article

ZeroHedge Article


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