‘We can rely on markets’ Standard Chartered’s Bill Winters implores use of effective carbon market to combat climate crisis
Standard Chartered’s chief executive Bill Winters called for more action on the carbon credits market saying he was “frustrated” work had not yet been finished despite the urgency of the task.
Speaking at the City Week conference, Winters, who chairs a private sector-led initiative working to scale the voluntary carbon market, argued that governments around the world are ill placed to force firms to reduce emissions but highlighted the power of markets to cut carbon usage.
“We can rely on markets,” Winters said. “Markets respond very directly to incentives.”
Carbon credits, also known as carbon offsets, are permits that allow the owner to emit a certain amount of carbon dioxide or other greenhouse gases.
Proponents argue that putting a price on carbon creates a monetary incentive for companies to reduce emissions making them much more likely to do so. Firms that cannot easily reduce emissions can still operate, but will face higher costs.
However, the market for credits is extremely fragmented as different credits use different systems to measure emission offsetting. Some forms of carbon credits have been hit by accusations that they don’t accurately capture emissions.
Winters said the potential of carbon markets could only be unlocked through consistent standards. “We need that basic consistent medium of exchange and until then I’m afraid the rest (of the energy transition) will be hard work,” he said.
A standardised carbon market would provide a “mechanism for turning well-meaning intentions into concrete actions, and there’s no more effective way than by having a market for this particular externality.”
While carbon credits help to offset carbon emissions, Winters noted that “the bulk of the work we do as a bank is on reducing emissions.”
Other panelists also stressed the importance of standardised and accurate carbon markets.
Annette Nazareth, chair of the integrity counsel for the voluntary carbon market, said she hoped there would be meaningful progress on establishing a more structured carbon market by COP28 later in the year.
“We do need to act very quickly, there is no question about it,” she said.