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Bill Winters on trading carbon credits


Bill Winters, chief executive officer of Standard Chartered Plc, gestures while speaking during a Getty Images Many businesses have begun to buy credits in an effort to reduce their carbon footprints. This is part of a worldwide climate change fight.Television interview in London, U.K., on Thursday, July 4, 2019.

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In a global effort to fight climate change, many businesses are buying credits to offset their current carbon emissions as they target sustainable reduction of greenhouse gases.

Standard Chartered Group CEO Bill Winters said that this alone would not be enough to address the challenges posed the climate crisis.

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Winters stated that the voluntary carbon market has a crucial role, in an audio message recorded Tuesday during Ecosperity Week 2021.

It will always be secondary to our primary objective of decreasing the economy’s carbon intensity, he said.

Voluntary carbon market

A carbon credit is generated by projects that help reduce, remove or avoid greenhouse gases. They are certificates representing the quantities of greenhouse gases that have been kept out of the air or removed from it.

Companies buy and sell those credits in a voluntary carbon market as a way to offset their emissions — when a credit is claimed, it can no longer be sold.

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Winters said the voluntary carbon market is critical because of two reasons. This market can move billions in money from corporations that have made commitments to lower emissions, and put them in the hands of those who are able to actually decrease the amount of greenhouse gases in the environment.

Second, when done right, such a market can provide a price for carbon with a high degree of confidence and integrity — beyond the prices at which carbon credits are traded.

Winters said that this would enable public and corporate leaders to make more informed decisions.

Challenges ahead

Winters said the voluntary carbon market is undermined by uneven standards, a lack of transparency and poor integrity for some carbon credits. He chairs a private-sector led global taskforce that aims to establish a set of core carbon principles and a governance process that would help scale up the voluntary carbon market.

High-quality carbon credits are scarce because accounting and verification methods tend to vary and the benefits are seldom well defined, according to McKinsey & Company.

It is a problem that the private sector has to solve as demand for carbon credits are expected to rise — McKinsey expects the overall market could be worth upward of $50 billion.