Justice cannot be offset

It was not without pride that the Federal Office for the Environment (FOEN) unveiled the "world's first foreign climate protection project under the Paris Agreement" before the UN Climate Conference in November 2022: it is a project to reduce the methane output from rice cultivation in Ghana. Since 2020, Switzerland has concluded bilateral agreements with 11 countries in the Global South for the funding of climate protection projects whose emission reductions can then be attributed to Switzerland. Offset projects abroad had already been contemplated in the Kyoto Protocol. The rules have been reset in the Paris Agreement, which now requires not just industrialised countries but all contracting States to pursue the most ambitious possible climate policy and to report on their progress.

Switzerland is leading the way in implementing this new market mechanism, and is therefore able to set certain standards. But some crucial issues do arise, especially for wealthy Switzerland:

The issue of justice

Switzerland has committed to halving emissions by 2030, achieving net zero by 2050. It is among the countries that are still driving climate change through their high levels of greenhouse gas emissions; at the same time, the country is well-off enough financially to cope with the impacts of climate change here at home. Contrastingly, there are numerous countries and millions of people who have so far emitted virtually no greenhouse gases and yet are suffering much more from the climate crisis, as they are much more vulnerable to its adverse effects and have more limited financial resources for adaptation or for repairing the damage. The unwillingness of rich countries to reduce their considerable domestic emissions quickly and transition to climate-friendly technologies therefore runs counter to climate justice. Instead, foreign offset projects are being registered as their own reductions. This has already elicited international criticism, for example, from the New York Times.

Owing to its consumption-based footprint, its companies with worldwide operations, and its financial centre, Switzerland indeed bears some part of the responsibility for emissions abroad. However, climate protection projects abroad should be funded in addition to emission reduction projects in Switzerland – they would represent a fair share of international climate funding.

The issue of ambitions

Officially, the market mechanisms under the Paris Agreement should allow for more ambitious reduction targets, as these can be achieved at less cost and therefore lead to further emission reductions. In the short term, the cost argument can make sense for a country that emits substantial amounts of greenhouse gases, and buys certificates. For the partner country, however, it could mean that selling certificates is tantamount to giving away the low-cost possibilities for reducing greenhouse gases. What then remains for achieving their own climate goals are the more costly and complex options, as already shown in a study by the New Climate Institute. The yardstick for more ambitious goals is that a project must come in addition to other planned climate protection projects, and not be a replacement for another. In many instances, this is hard to prove. In terms of Switzerland's ambitions, this means that offsets are of additional utility only when it is not possible to make the corresponding greenhouse gas reductions in Switzerland. In the light of Switzerland's rather insufficient climate protection measures, the policy aim of not fully implementing the goal of halving greenhouse gas emissions in Switzerland by 2030 must be seen as a rejection of a more ambitious climate policy. In Switzerland's case therefore, foreign offsets cannot be described as ambition-raising.

The big question is, what becomes of the ambitions of market participants if a large number of countries enter this market. The mere possibility of purchasing low-cost certificates could induce rich climate offenders to become negligent towards their own domestic climate goals. Inversely, the ambitions of some partner countries regarding their own climate goals can hardly be raised, if climate protection is possible for them financially only if they sell their emission reductions. This is all the more so considering that, according to the International Monetary Fund (IMF), some of Switzerland's partner countries are heavily burdened with debt. In the final analysis, Switzerland is promoting a dangerous experiment that is putting the global climate at risk.

The issue of quality

If emission reductions from a climate protection project based on the bilateral agreement are to be transferred to Switzerland, the project must meet certain qualitative specifications. Besides the aforementioned additionality, and the proven reduction of greenhouse gases, a project must also contribute to sustainable development locally. Moreover, it must assist the partner country in acquiring new technologies. This approach rules out some categories of projects from the outset, e.g., those that the partner country itself can implement (called “low-hanging fruits”). These quality criteria are paramount. The ability to observe them could nonetheless be compromised, should there be substantial demand on the part of Switzerland and other countries for cheap offset certificates. In this context, the inclusion of the local people and the availability of sufficient avenues for redress are paramount. The FOEN will find it difficult to monitor the quality of these projects should their number increase substantially, and if they are distributed all around the world.

Ultimately, these issues all pertain to global climate justice. Switzerland should not use foreign offsets as a pretext for delaying its own transition to a climate-friendly future. Offset projects should by no means be simply rubber-stamped as a good thing, but must be assessed jointly with the people in the Global South. They should never replace an ambitious climate policy in Switzerland. This makes it all the more crucial to lay the groundwork for this by voting "Yes" to the law on climate goals on 18 June.