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Carbon credits: knowing how to pick the right investments

Low-quality projects do more harm than good, but knowing how to differentiate them from high-quality credits can be tricky

Michelle Quah

Michelle Quah

Published Mon, May 22, 2023 · 05:50 AM
    • The application of the Core Carbon Principles will effectively bifurcate the market between high and low grade credits, and provide some assurance for investors, says Ken Newcombe, CEO of C-Quest Capital. PHOTO:
    • Mike Korchinsky, founder and CEO of Wildlife Works, says investors need to understand that successful projects depend much on how closely project managers work with stakeholders - in particular, the communities that live in and are affected by the projects. PHOTO:
    • Many investors still have the misconception that carbon markets are too small, too new and too opaque, but these are ready to take a major leap forward in scale and sophistication, says Rich Gilmore, CEO of Carbon Growth Partners. PHOTO:
    • Smallholder farmers, like Sandra Braga here, produce up to 75 per cent of the world’s food, and have the potential to manage billions of tons of carbon assets every day. PHOTO:
    • The application of the Core Carbon Principles will effectively bifurcate the market between high and low grade credits, and provide some assurance for investors, says Ken Newcombe, CEO of C-Quest Capital. PHOTO: C-QUEST CAPITAL
    • Mike Korchinsky, founder and CEO of Wildlife Works, says investors need to understand that successful projects depend much on how closely project managers work with stakeholders - in particular, the communities that live in and are affected by the projects. PHOTO: WILDLIFE WORKS
    • Many investors still have the misconception that carbon markets are too small, too new and too opaque, but these are ready to take a major leap forward in scale and sophistication, says Rich Gilmore, CEO of Carbon Growth Partners. PHOTO: CARBON GROWTH PARTNERS
    • Smallholder farmers, like Sandra Braga here, produce up to 75 per cent of the world’s food, and have the potential to manage billions of tons of carbon assets every day. PHOTO: RESEED

    CARBON credits haven’t always had the best reputation. In addition to criticisms that they help some to mask their true carbon footprint, the bigger concern is with poorly-run projects – the ones that not only fail to deliver on their environmental promises, but may also be detrimental to the communities within which they are sited.

    With many of them sitting alongside well-run projects, it can be tough for some investors, particularly those who are newer to the game, to know which is which. A well-meaning purchase of carbon credits to set off the emissions of one’s air travel, for example, could end up causing more harm than good.

    The Business Times spoke to project managers whose enterprises span various causes and geographical regions to get a better sense of the work that’s done on the ground, and for a firmer grasp of the attributes of good-quality projects.

    CarbonESGClimate change

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