China’s New Sustainability Is Fueled by Carbon Offsets and Some Disapprove

(Yicai Global) May 23 — Chinese firms are starting to take action to control their carbon dioxide emissions but for some, change is driven by affordable carbon offsets, which divides experts’ opinions.

As more than 10 leading companies in sectors including internet, finance, and manufacturing recently released their 2022 climate action reports, some of them show that nearly half of the achievements are made up by carbon credits instead of limiting energy usage or shifting to renewables, Yicai Global learned.

Companies are keen to appear sustainable but if it becomes more usual to rely on carbon credits, firms are less likely to strive to diminish their direct carbon footprint and society will underestimate the need to go green, industry insiders said.

It is a typical issue to rely on carbon credits too much, Fan Bo, researcher at the New Economists Think Tank, said to Yicai Global. For example, one fintech firm cut 25,091 tons of carbon emissions and purchased nearly 21,088 tons of carbon offsets, so the latter made up over 45 percent of the total effort. Based on the current prices, the offsets cost the firm less than CNY2 million (USD283,583), he added.

However, other insiders said that because society is just starting to agree on the urgency of cutting emissions and energy companies have not even peaked their emissions yet, carbon credits are still part of the solution not part of the problem.

Right now, firms should be encouraged, incentivized, and guided to achieve carbon neutrality because there are only a few companies that can truly match their business strategies with the goal, according to Huang Junpeng, founder of Youlv Think Tank.

Editor: Emmi Laine, Xiao Yi

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