Carbon Credit Trading is Broken

 

The forest carbon offsets approved by the world’s leading provider and used by big corporations who have told their consumers they can fly, buy new clothes or eat certain foods without making the climate crisis worse are largely worthless and could be making global warming worse. The findings pose serious questions for those companies that are depending on offsets as part of their net zero strategies.

Research into Verra, the world’s leading carbon standard for the rapidly growing $2bn (£1.6bn) voluntary offsets market, has found that, based on analysis of a significant percentage of the projects, more than 90% of their rainforest offset credits – among the most commonly used by companies – are likely to be “phantom credits” and do not represent genuine carbon reductions.

A nine-month investigation has been undertaken by the Guardian, the German weekly Die Zeit and SourceMaterial, a non-profit investigative journalism organisation is based on new analysis of scientific studies of Verra’s rainforest schemes. It draws on dozens of interviews and on-the-ground reporting with scientists, industry insiders and indigenous communities.

Verra operates a number of leading environmental standards for climate action and sustainable development, including its voluntary carbon standard (VCS) that has issued more than 1bn carbon credits. It approves three-quarters of all voluntary offsets. Its rainforest protection programme makes up 40% of the credits it approves and was launched before the Paris agreement with the aim of generating revenue for protecting ecosystems.

The investigation found that:

1.

Only a handful of Verra’s rainforest projects showed evidence of deforestation reductions, according to two studies, with further analysis indicating that 94% of the credits had no benefit to the climate.

2.

The threat to forests had been overstated by about 400% on average for Verra projects, according to analysis of a 2022 University of Cambridge study.

3.

Gucci, Salesforce, BHP, Shell, Easyjet, Leon and the band Pearl Jam were among dozens of companies and organisations that have bought rainforest offsets approved by Verra for environmental claims.

4.

Human rights issues are a serious concern in at least one of the offsetting projects. The Guardian visited a flagship project in Peru, and was shown videos that residents said showed their homes being cut down with chainsaws and ropes by park guards and police. They spoke of forced evictions and tensions with park authorities.

“I have worked as an auditor on these projects in the Brazilian Amazon and when I started this analysis, I wanted to know if we could trust their predictions about deforestation. The evidence from the analysis – not just the synthetic controls – suggests we cannot. I want this system to work to protect rainforests. For that to happen, we need to acknowledge the scale of problems with the current system,” said Thales West, a lead author on the studies by the international group.

Erin Sills, a co-author in the international group and a professor at North Carolina State University, said the findings were “disappointing and scary”. She was one of several researchers who said urgent changes were needed to finance rainforest conservation. 

“I’d like to find that conserving forests, which conserves biodiversity, and conserves local ecosystem services, also has a real effective impact on reducing climate change. If it doesn’t, it’s scary, because it’s a little bit less hope for reducing climate change.”

David Coomes‬, a professor of forest ecology at the University of Cambridge who was a senior author on a study looking at avoided deforestation in the first five years of 40 Verra schemes, was part of the Cambridge group of researchers said there was a big gap between the amount of deforestation his team estimated the projects were avoiding and what the carbon standard was approving. “It’s safe to say there are strong discrepancies between what we’re calculating and what exists in their databases, and that is a matter for concern and further investigation."

Barbara Haya, the director of the Berkeley Carbon Trading Project, commented, “One strategy to improve the market is to show what the problems are and really force the registries to tighten up their rules so that the market could be trusted. But I’m starting to give up on that. I started studying carbon offsets 20 years ago studying problems with protocols and programs. Here I am, 20 years later having the same conversation. We need an alternative process. The offset market is broken.” 

Revealed: more than 90% of rainforest carbon offsets by biggest provider are worthless, analysis shows | Carbon offsetting | The Guardian