Reuters.- Uber has set out to be carbon neutral by 2040, but the trucking company has chosen a route that in some parts of Latin America is fraught with challenges.
Since February, the US mobility group has offered its customers in Mexico the “Uber Planet” option. For an additional 0.37 pesos per kilometer, they can contribute to the purchase of carbon credits for reforestation projects and a wind farm in Oaxaca to offset the emissions caused by their trips.
Carbon offsets are controversial. When countries and companies find it difficult or expensive to reduce greenhouse gas emissions, they sometimes use offsets to meet climate targets.
These allow buyers to continue polluting while paying someone else to take climate-friendly action.
Uber’s own climate report from last year said the company avoided buying offsets as a primary strategy, instead emphasizing subsidies for its drivers to switch to electric vehicles.
The offsets “effectively pay to be someone else’s responsibility” and have “weaknesses,” including verification challenges, according to the Uber report.
However, the company told Reuters that in some parts of Latin America the transition of drivers to zero-emission electric vehicles is “impractical” in the short term, given the incipient markets for such cars.
So in Mexico, Colombia, Ecuador and Costa Rica it is using the Uber Planet compensation scheme, along with efforts to encourage drivers to switch to electric models, he added.
The decision underscores the difficulties transportation companies face when trying to reduce their carbon footprint in emerging markets with relatively few sustainable alternatives.
According to data analytics firm JD Power, electric and hybrid vehicles represent only 6.4% of the Mexican auto market, compared to 15% worldwide. By 2030, the market share is forecast to reach 12% in Mexico, well below the 50.5% forecast globally.
MAKING THE DIFFERENCE?
Uber Planet buys credits in projects that have been certified by organizations such as the United Nations Framework Convention on Climate Change (UNFCCC) and the Climate Action Reserve (CAR), a non-profit registry.
The certification is supposed to confirm that projects would not exist without the sale of carbon credits, ensuring that they are actually creating offsets.
But a Mexican scheme backed by Uber, the Oaxaca IV wind farm project, may have gone ahead without the credits, according to Gilles Dufrasne, a policy officer at the nonprofit industry monitor Carbon Market Watch.
Certification documents for the 2011 project, reviewed by Reuters, showed that carbon credits would provide an increase of around 1% in its internal rate of return.
The project developers said in documents, submitted to the UNFCCC, that carbon credits were vital to securing financing. But Dufrasne said the modest benefit raises questions about whether they were necessary.
“The goal of selling carbon credits is to have some way of measuring the additional (emission) reductions that would not have occurred without selling the credits,” he said. “But if they were going to build the project anyway, then what you’re paying for now doesn’t make any difference.”
Danny Cullenward, an offset specialist at CarbonPlan, a nonprofit research group that reviewed the project documents, also questioned whether the loan sale was necessary to secure funding.
He also pointed out that the wind farm had an agreement for the government to buy its production at a guaranteed price.
“This is not a commercial venture that is a bit risky and needs a little boost to stay afloat,” Cullenward said. “It is an infrastructure project with mature commercial technology that had a fixed price contract with the Mexican government.”
A spokesperson for Acciona de España, the parent company of Oaxaca IV, said the project was examined under the Clean Development Mechanism (CDM) of the UNFCCC.
“The fact that the UN has included the Oaxaca IV project under the CDM mechanism is in itself proof of the contribution of the wind farm to the UN’s sustainable development goals,” the spokesperson said.
The UNFCCC did not respond to requests for comment.
The wind project represents about 16% of Uber Planet’s carbon credit purchases in Mexico, according to data from Uber’s local website. Of the 8,668 credits it purchased from Honduras-based carbon credit broker Anaconda Carbon between February and August, nearly 1,400 were from the project.
Uber referred questions about the project to Anaconda.
Anaconda President Christian Giles responded to Reuters that the wind farm was properly validated and that the proceeds from carbon credits were vital to this.
“That argument was audited, not only by an independent third party, but also by the UN itself,” he said, referring to the UNFCCC.
‘DOUBLING TIME’
Companies are under pressure from activists, investors, politicians and even each other to reduce emissions.
In Mexico City, Uber faces new competitors like Beat Tesla, with an all-electric fleet of Teslas. Meanwhile, Didi Global of China says it has 1,600 hybrid or electric vehicles in Mexico.
Uber says it is determined to cut emissions.
“All markets where Uber is available will take bold steps to develop locally relevant strategies that move in parallel with our commitments. At this time, we are presenting Uber Planet, understanding the urgency necessary to end this challenge immediately, ”said David Mínguez, spokesperson for Uber in Mexico.
He noted that the company will take steps “in the coming months” to encourage more drivers to switch to electric or hybrid cars, including promotional prices for the vehicles and incentives such as an additional 10,000 pesos for 160 trips.
It predicted that more than 600 of its drivers in Mexico could switch to an electric or hybrid vehicle in 2022. Uber has about 200,000 drivers and delivery partners in the country.
Follow the information about business and current affairs in Forbes Mexico
The high price of electric vehicles puts them out of reach for most Mexicans, whose average daily salary is less than $ 21, while the country lacks tax incentives and charging infrastructure to encourage drivers to switch.
“We are going to move on to that, but it will take more than twice the time of what will happen in all other parts of the world,” predicted Gerardo Gómez, director and country manager of JD Power in Mexico.
Follow us on Google News to keep you always informed