DM Monitoring
LONDON: Oil companies such as BP and Shell are nurturing nature as a future revenue stream, betting on an expected rise in carbon credit prices as their fossil fuel profits ebb.
BP last year put $5 million into Finite Carbon, a company that connects forestry owners with companies seeking to offset their climate-warming emissions via-tree planting.
The Californian firm expects to generate $1 billion for landowners over the next 10 years, after a 20-40% cut of the proceeds, its chief executive Sean Carney said.
And as companies and countries have rushed over the last year to pledge new net-zero global warming pledges, that forecast may be too conservative, Carney said.
“When you put it next to all the announcements and all the talk, it’s a really small number. We might be thinking too low here given the commitments,” he told media. Climate change goals, agreed in Paris in 2016, have fuelled a growing, but still immature, market for carbon offsets as companies and countries seek to fall in line.
European oil majors say investing in projects to create more credits is simply good business, offering new revenue streams at a time when oil prices have collapsed and appetite for new exploration evaporates.
“Investing in carbon sequestration, at a time when the world is increasingly carbon constrained, over time will prove to make good commercial, business sense,” Duncan van Bergen, Shell’s head of Nature Based Solutions, told Reuters. Big oil’s involvement has split environmentalists.
Sarah Leugers at the non-profit Gold Standard Registry welcomed interest from large emitters in nature conservation, but added: “I do worry that they’re initiating projects in a market that they can profit from that’s attempting to solve a problem that they’ve largely created,” Leugers said.
Others note the cash is going toward projects of universal benefit. “Why would it be OK to make money with digging out fossil fuels, but not with saving the planet?” said Renat Heuberger, CEO of the leading climate project developer South Pole, which typically takes a 10% cut from credits it develops and sells.
Although some industries are covered by carbon-trading schemes enshrined in law, such as in the European Union, California and Australia, most of the world has no such government-backed markets.
