The emerging carbon offsets market is chaotic and dysfunctional. Problems need to be addressed openly, and resolved as quickly as possible. A joint investigation by the Guardian, the German weekly Die Zeit and SourceMaterial revealed in January that the vast majority of rainforest offset credits from the leading certifier – which are sold to companies that then use them to make claims about their overall emissions – do not offer the environmental benefits that they claim. Since then, scrutiny has only increased, with more questions being asked of the western businesses behind projects such as Kariba, a huge offset-promoted forest in Zimbabwe.
Recognising the urgent need to rebuild flagging confidence, if the carbon-trading system is not to collapse as it did once before, the Integrity Council for the Voluntary Carbon Market last week announced that new rules for offset issuers will be announced in May. A separate process overseen by a different body is reviewing the claims that businesses make, based on their offset purchases. While all this might sound remote from the concerns of most people, the stakes could hardly be higher. Many environmentalists would prefer governments to oversee a transfer of resources from rich countries to the forested nations that need incentives to conserve precious carbon sinks. The reality is that due to the way our global economic system is organised, we all depend on market mechanisms.
As the body that certifies most offsets, including for household-name companies such as Disney and Shell, the Washington-based non-profit Verra is in a particularly awkward position. Last month it announced that its current rainforest programme would be phased out and replaced by July 2025. But it has also defended its current methodologies, describing them as the “best in class” for now. It is not clear whether organisations that use Verra credits will stick with them.
The danger of carbon offsets, frequently raised by campaigners, is that their primary function is greenwashing. Fossil fuel companies are among their biggest buyers; Verra has close ties to the industry. Allowing companies to declare themselves, or products including airline tickets, to be “carbon neutral”, is not just misleading – when the offsets have been shown to be flawed – but harmful. As well as giving businesses a licence to carry on polluting, it fuels the widespread fantasy that western lifestyles do not need to change, and that consumption can continue unabated.
There is also evidence that some credit schemes are not only failing to promote the role of Indigenous people as stewards of important habitats, but doing the opposite. Community leaders have complained of “carbon pirates” turning up in remote places with lucrative offers which turn out not to be what they seem.
Some carbon offset schemes have been shown to work, as a means of financing conservation. If the $2bn (£1.6bn) industry can learn from recent events, by increasing transparency and integrity, there is a chance that good practice can be built on, while poor practice is stamped out. If the voluntary carbon market fails, then alternative mechanisms must be found to honour the implicit promise of the Paris climate agreement, that the world’s forests will be worth more alive than dead. That we can’t trade or offset our way out of the climate crisis remains the most important message. Our planet’s resources are finite.
