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carbon credits
The Misleading Allure of Plastic Credits
Government delegates negotiating a plastics treaty should resist the urge to incorporate quick fixes like plastic credits in the text, and instead should set ambitious, non-negotiable targets for plastic reduction and reuse.
Aug 14, 2025
The escalating global plastic pollution crisis demands urgent, decisive action, with plastic threatening ecosystems and human health.
Governments are convening at the second part of the fifth session of the Intergovernmental Negotiating Committee (INC 5.2) in Geneva, tasked with forging a historic, legally binding instrument to tackle plastic pollution across its entire life cycle—a mandate enshrined in the United Nations Environment Assembly (UNEA) Resolution 5/14 three years ago.
Plastic credit schemes are increasingly discussed on the sidelines of the ongoing treaty negotiations—often presented under the umbrella of blended and innovative financing. Proponents argue that these schemes can potentially close the gap in countries with inadequate waste management infrastructure. Plastic credits have not explicitly made it in the most recent Chair’s Text at the ongoing INC 5.2 meeting, but they were mentioned in one of the expert group meetings in August 2024, as an innovative financing approach, with the potential to “incentivize companies to shift towards sustainable practices.”
Scientists have estimated that it would cost $18.3-158.4 trillion to support global actions toward zero waste pollution by 2040. According to the World Bank, income generated from plastic credits can potentially help close the funding gap for plastic waste management by 2040, amounting to about $240 billion annually. These benefits may sound enticing particularly with the urgency of securing funding to address plastic pollution, but in fact represent a dangerous distraction, risking greenwashing and diverting critical finance and political action.
The future of our planet depends on preventing plastic pollution at its source, not pursuing plastic credits to offset harm after it is done.
Plastic credits appear to be a win-win solution on paper—companies provide funding for waste collection initiatives to “offset” their plastic footprint. However, this approach mirrors the shortcomings of carbon offsetting, which has faced numerous problems, including “phantom credits,” lack of new emission reductions, and double counting. While a universal definition for plastic credits is still under development, organizations like PCX Solutions, Verra, BVRio, and the World Bank generally agree on this scheme as a results-based financing mechanism, which funds projects designed to tackle plastic pollution, primarily through collection and recycling efforts. Plastic credits have initially been introduced as voluntary schemes, in which businesses may purchase credits to “offset” their plastic footprint, or the amount of plastic they have produced, often done to enhance brand image, meet sustainability commitments, and fulfill corporate social responsibility (CSR) initiatives.
There are several countries that have incorporated plastic credits into their extended producer responsibility (EPR) policies, as a way for companies to achieve regulatory compliance. The Philippines, for example, mandates large corporations to gradually offset their plastic footprint, aiming for an 80% collection or recovery by 2028. This system permits plastic offsetting as an alternative to EPR fees, which are conceptually intended to fully cover plastic waste management costs—a burden often borne by municipalities. However, it remains uncertain whether existing EPR policies with plastic offsets fully cover the cost of managing plastic waste.
Experts have argued that plastic credit mechanisms lack a standardized accounting system, making it challenging to effectively measure credits from plastic offsetting projects and plastic footprints. They also found that plastic credits face difficulties in meeting critical offset criteria such as additionality, permanence, and the “no-harm” principle. It is difficult to prove that the plastic collected or recycled through a credit scheme would not have been managed anyway. A 2023 investigation into Verra’s databases, for instance, found that more than 80% of listed projects have been operational for more than a year before being listed on the registry platform, contradicting claims that these activities are unviable without funding from plastic credits.
There are also concerns about permanence, largely due to the challenges of achieving genuinely closed-loop recycling for plastic waste. The meager 9% global recycling rate for plastic highlights the challenges posed by its complex compositions and chemical additives, as well as the economic impracticality of such interventions. It is not surprising that many of these plastic credit projects involve burning collected plastic waste in cement kilns.
Experts have warned that current credit prices are too volatile to provide sustainable funding for waste management. SourceMaterial uncovered a significant price disparity within a registry platform: Plastic credits linked to co-processing treatment in cement kilns are available for as little as $115 per credit, whereas credits from community-based collection projects can cost up to $630. Using the Philippines EPR case, the price disparity suggests that companies may opt for the cheapest credits derived from burning for regulatory compliance, rather than pursuing plastic reduction measures.
Plastic credits are fundamentally flawed and risk becoming a costly diversion from meaningful action. Government delegates attending the INC 5.2 meeting should resist the urge to incorporate quick fixes like plastic credits in the treaty text, and instead should set ambitious, non-negotiable targets for plastic reduction and reuse, ensuring accountability across the entire plastic life cycle, as mandated under UNEA Resolution 5/14.
A strong, dedicated financial mechanism is essential for the treaty. Developed member states should fund a substantial portion of the contributions, in line with the principles of common but differentiated responsibilities and polluter pays. This will ensure that the health and environmental costs are internalized, and funds are available for remediation to protect human health, biodiversity, and the environment. Likewise, the financial mechanism should also direct investments toward initiatives focusing on plastic production caps and waste prevention, as well as the development and scale-up of safe, non-toxic, and accessible reuse and refill systems, rather than limiting to downstream interventions like recycling and waste management. Furthermore, it should support and facilitate a just transition for workers along the plastics life cycle, including waste pickers and other informal workers and workers in cooperative settings, Indigenous Peoples, and frontline or directly affected communities.
The future of our planet depends on preventing plastic pollution at its source, not pursuing plastic credits to offset harm after it is done. Real solutions begin with reduction, not compensation.
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COP29 Was a Missed Opportunity: Rethinking Our Path to a Just and Sustainable Future
COP30 must be the summit that moves beyond the transactional nature of past negotiations to embrace ideas that recognize the intrinsic value of nature and the need for global solidarity in protecting it.
Dec 17, 2024
COP29 in Baku, Azerbaijan has come and gone, leaving behind a sense of cautious reflection rather than the transformative shift many had hoped for. While the summit certainly brought some progress, it has left us with the bittersweet feeling that the climate crisis, with its urgent and pervasive impacts, still seems to be an issue addressed by small steps rather than bold, immediate action. In this sense, COP29 could be seen as both a missed opportunity and a call to rethink our approach to climate change.
A key discussion centered on mobilizing $300 billion annually by 2035 for climate mitigation efforts in vulnerable countries. While this figure might seem substantial, experts argue that at least $1.3 trillion is needed to address the crisis effectively. Even more concerning, however, is the lack of clarity about the sources of this funding; whether public or private, and how it will be allocated. While the commitments made are modest, they underscore a greater issue: the need for a radical shift in how climate finance is understood and structured.
Despite reservations, COP29 provided space for relevant debates about how to create a more inclusive and just financial system. The mobilisation of resources for the Global South is undoubtedly pressing, and the conversation is really just getting started. What is increasingly clear is that we must rethink the economic structures we have inherited, which often fail to address the systemic inequalities that underpin the climate crisis. Financial solutions must be holistic, incorporating the needs of vulnerable populations and the environment in ways that go beyond traditional market-driven approaches.
The environmental crisis cannot be solved by perpetuating existing power dynamics but requires finding solutions rooted in equity, justice, and a deep respect for the interconnectedness of all life.
Meanwhile, at the G20 summit, which ran in parallel to COP29, discussions on Universal Basic Income (UBI) for countries most affected by climate change gained traction. Countries in Latin America, including Brazil and Colombia, championed this idea, seeing it as a preventive measure against the growing polycrisis. UBI could offer a crucial safety net for populations already feeling the severe impacts of climate disruption. Despite its growing relevance and the goals set for COP30, UBI was sidelined at COP29, with market-based solutions taking center stage—solutions that largely overlook the root causes of the climate emergency.
The insistence on market-driven solutions, such as carbon credits, remains a central feature of international climate discussions. These mechanisms, which allow wealthy countries and corporations to offset emissions by purchasing credits from poorer nations, have yet to deliver the necessary reductions in global emissions. What is more concerning is that these market-based solutions reinforce a narrative of economic growth over environmental sustainability. Until the global conversation shifts away from this paradigm, meaningful progress will remain elusive.
The focus on market mechanisms at COP29 underscores the persistent power imbalances that shape climate action. Current international decision-making continues to rely on "realpolitik"—power dynamics that have failed to address both environmental and peace crises. This approach reinforces the dominance of wealthier nations and multinational corporations, while the voices of the Global South remain marginalized.
Although COP29 did not embrace the bold ideas needed to tackle the climate crisis, it has made one thing clear: The future of climate action lies in transforming how we relate to the planet and to each other. Climate change is a social justice issue that disproportionately affects vulnerable populations, yet their voices continue to be overlooked in global decision-making. The environmental crisis cannot be solved by perpetuating existing power dynamics but requires finding solutions rooted in equity, justice, and a deep respect for the interconnectedness of all life.
One potential avenue for transformative action underrepresented at COP29 is the Cap and Share model. This proposal advocates for a carbon tax on the largest polluters, with the revenue redistributed to support vulnerable populations. By holding major emitters accountable and ensuring the most affected communities are supported, Cap and Share challenges the economic systems that have exacerbated both environmental degradation and social inequality. Such an approach would lay the foundations for a fairer and more sustainable global response to the climate crisis.
Looking ahead to COP30, there is an opportunity to break the cycle and center discussions on a more profound philosophical reimagining of our relationship with nature. It is time to ask ourselves: What does a "good life" mean in the context of the climate crisis, and how can we redefine it in a way that prioritizes ecological harmony over economic interests? COP30 could be the moment to rediscover the wisdom that reminds us that humanity is not separate from nature, but an integral part of the web of life that sustains the planet.
To make this shift a reality, we must draw inspiration from initiatives that can empower local communities, particularly in regions most affected by climate change. The principles of Cap and Share can materialise not just through international policy but by supporting initiatives in local territories that engage communities who have suffered the consequences of climate change while also playing a critical role in preserving biodiversity. These initiatives could provide the foundation for overcoming the structural inequalities that perpetuate social and environmental harm, giving rise to a more just and sustainable world.
COP30 must, therefore, be the summit that moves beyond the transactional nature of past negotiations. It should be the moment when we embrace ideas that recognize the intrinsic value of nature and the need for global solidarity in protecting it. But for that to happen, we must first ask: Are we prepared to rethink the way we relate to the planet and each other in order to build a more just and sustainable future?
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'Unacceptable': Campaigners Decry Climate Finance Failures as COP29 Enters Final Hours
"By the end of the UN climate talks, we must see at least a trillion dollars in public finance on the table," said one campaigner.
Nov 21, 2024
As the clock winds down at the UN climate summit taking place in Baku, Azerbaijan, green groups are sounding the alarm Thursday following the release of a draft climate finance deal that they say falls short of what's needed to support climate-vulnerable countries and adequately address the planetary crisis.
"The clock is ticking. COP29 is now down to the wire," said UN Secretary-General António Guterres on Thursday, just a day before the two-week conference is set to conclude.
Finance has been a major focus of this year's summit. Under the 20125 Paris Agreement, countries are supposed to come up with a "new collective quantified goal"—or NCQG in COP jargon—that will govern how much money from rich countries will be transferred to developing countries in order to help the latter cut their emissions and adapt to climate change.
No equivalent climate finance arrangement has been agreed to before, though countries at the summit broadly agree that richer countries, who are responsible for much of historic CO2 emissions, should help poorer and more climate-vulnerable nations deal with natural disasters and their transition to green energy.
The draft text that dropped early Thursday, however, was received poorly.
Oxfam International's climate justice lead, Safa’ Al Jayoussi, said "COP29 must do more than simply repeat the same threadbare promises. Rich countries have spent decades now stalling and blocking genuine progress on climate finance. This has left the Global South suffering the most catastrophic consequences of a climate crisis they did not create. The draft text scandalously misses the crucial element of declaring a clear public commitment to a new climate finance goal."
Instead of specifying how much annually should be funneled towards developing countries via climate finance, the NCQG draft text displayed "X" in place of any actual figures or monetary commitments.
Oscar Soria, a director at the Common Initiative think tank, told the Guardian: "The negotiating placeholder 'X' for climate finance is a testament of the ineptitude from rich nations and emerging economies that are failing to find a workable solution for everyone."
"By the end of the UN climate talks, we must see at least a trillion dollars in public finance on the table," added Andreas Sieber, 350.org associate director of policy and campaigns. Economists told the summit attendees last week that developing countries need at least $1 trillion annually by 2030 to deal with climate change.
A specific and shared concern from campaigners was the draft text's inclusion of carbon market schemes as a way "to scale up" climate finance. While the draft promotes "high-integrity voluntary carbon markets" and other "instruments that mobilize new sources of climate finance and private finance" as part of the equation, critics have long warned that these market-based approaches are nothing but false solutions designed to benefit corporate investors, wealthier nations, and the fossil fuel industry itself.
"Labelling carbon credits as climate finance—which they are unreservedly not—should be axed from the text or risk creating a dangerous escape route for polluters. The same goes for explicitly allowing investments in fossil fuel infrastructure. This is fundamentally incompatible with the goals of the Paris Agreement," said Laurie van der Burg, Oil Change International's global public finance manager, in response to the draft text.
While Article 6 of the Paris Agreement allows for the international transfer of carbon credits, groups warned the changes in the COP29 draft would dramatically strengthen the foothold of such schemes.
"Shockingly, COP29 is set to agree to carbon markets that are even worse than the voluntary carbon markets," said Kirtana Chandrasekaran, a climate campaigner with Friends of the Earth International. "We know these markets have failed. They are riddled with fraud and they do not reduce emissions or provide finance. Communities everywhere and, in fact, the planet itself is on the line."
Without addressing these concerns, advocates of a meaningful deal at the conference say COP29 is headed for failure.
As 350.org's Sieber argued, paying the "historic debt that rich countries owe will enable all nations to take action on climate at home and meet the collective goal agreed last year at COP28—to triple renewable energy, and transition away from fossil fuels. Right now, we only see cowardice and a void in leadership, ignoring the undeniable science that we can't keep polluting our planet with dirty oil, gas and coal."
"The time to course correct is now—the European Union and other rich countries must stop playing poker with the planet and humankind's future at stake," Sieber added. "It's time to put their cards on the table and commit real, transformative funding—no more excuses, no more delays, it's time."
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