Amazon, Microsoft & Exxon Back Carbon Market Integrity

Efforts to Restore Trust in Voluntary Carbon Markets

Several major corporations, including Amazon, Exxon, and Microsoft, are now participating in a newly formed task force. The aim is to rehabilitate the reputation of voluntary carbon markets, which have recently been beset by controversy.

Task Force Objectives and Structure

Organized by the Bipartisan Policy Center, this task force intends to bolster the credibility of voluntary carbon markets. It will achieve this by evaluating the current state of affairs and formulating “policy recommendations” for governmental involvement. These recommendations will focus on promoting markets that are fair, efficient, and transparent, as stated on the task force’s official website.

The panel consists of 17 independent members and was publicly announced last week. Its formation coincides with increased investment in AI by technology companies, which has positively impacted their stock values.

Challenges to Corporate Climate Pledges

However, this technological advancement has simultaneously created difficulties in meeting established climate commitments. For example, Microsoft experienced a substantial increase in carbon emissions during 2023.

Despite having nearly 20 gigawatts of renewable energy contracts, their emissions rose by almost 30% compared to the previous year. Similarly, Amazon’s progress toward its goals has slowed, showing only a slight reduction in emissions despite significant investments in renewable energy sources and electric delivery fleets.

Increased Reliance on Carbon Markets

To maintain the feasibility of achieving net-zero targets, both companies have become significant participants in voluntary carbon markets. Microsoft acquired over 7 million metric tons of carbon credits in the last month alone.

Furthermore, Amazon, along with other companies, invested $180 million last year in offsets designed to protect a large area of rainforest in Brazil.

Recent Scandals and Concerns

These markets, however, have been plagued by scandal in recent years. A 2023 investigation brought to light serious issues within Verra, a nonprofit organization responsible for certifying carbon credits.

The investigation revealed that Verra had sold a substantial number of offsets – tens of millions – that ultimately proved to be of little to no value. These credits were marketed as reducing deforestation in regions such as Peru, but analysis indicated that these areas were not genuinely at high risk of logging or land clearing.

The findings suggested that over 90% of rainforest-related credits had a negligible impact on reducing carbon emissions. Verra contested the report’s conclusions, and subsequently, its long-serving CEO resigned after six months.

Task Force Composition

The newly established task force, announced last week, also includes representatives from emerging companies like Heirloom, Isometric, and BeZero. Several nonprofit organizations are also represented.

Notably, the former CEO of Verra and an executive from the timber industry leader, Weyerhaeuser, are also members of the task force.