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Britain, Kenya and Singapore lead a campaign to increase company demand for carbon credits

Britain, Kenya, and Singapore launched a coalition to encourage companies to purchase carbon credits. The guidelines are aimed at buyers. Carbon market experts describe this as the strongest policy support for such markets yet.

Carbon market proponents have been trying to create a market to buy and sell credits that companies can use to offset their emission for decades. Corporate buyers are still hesitant despite the fact that nations agreed on a U.N. backed system at the COP29 conference in Baku.

On Tuesday, Britain, France Kenya, Singapore, and Panama announced their intention to reach an agreement on a set of basic principles for business by the COP30 conference in Brazil, in November. This is to encourage demand for a new product that can channel billions in climate finance into countries in need.

Ravi Menon is Singapore's Ambassador for Climate Action and one of the first signatories of the coalition. He said that carbon markets were a key lever to unlocking climate action but that buyers lack confidence in the market due to evidence of malpractices at certain projects.

He said that the challenge was on the demand-side. Corporates are less willing to purchase credits because of risks associated with greenwashing.

Bill Winters said that in the absence of taxation or government regulation, companies must have a reason for "doing the right thing."

He said, "Our owners no longer want us to be involved in anything which doesn't generate money." "We must reestablish a virtuous cycle that does not work today."

The rules for the use of carbon credits by companies are still not clearly defined. Even the main arbiter in corporate climate action is still consulting about how to use them.

Menon said, "Standard setting bodies have done an excellent job. But there is nothing like government."

According to Abatable data, the total number of credit cards used annually by buyers has remained around 160 million, even though the number has decreased.

Kerry McCarthy, Britain’s climate minister, stated that the coalition wants to send "strong signals" on businesses' use of carbon credits.

(source: Reuters)