In the News: Carbon Credits and Offsetting
I spend a considerable amount of time talking with clients, colleagues, and myself, about emission reduction strategies, green finance, net zero, and carbon offsetting. So its not surprising that I pay attention to headlines referring to anything in this field.
Despite this, carbon credits and the practice of offsetting is an area I find particularly interesting and one that has been appearing in the media more frequently in the last month. This is largely due to the publication of results from a 9 month investigation into rainforest carbon offset credits. The investigation was carried out by the Guardian, Die Zeit, and SourceMaterial. It focused on rainforest carbon credits offered by a leader in the voluntary carbon market (VCM).
Verra, the company in question, offers several programs including the Voluntary Carbon Standard (VCS). The standard, like many other in the VCM, injects finance into environmental projects that reduce of remove greenhouse gas (GHG) emissions by selling carbon credits to entities looking to offset their emissions as part of a net zero or carbon neutrality strategy. That’s the theory anyway.
Results from the investigation claim that 90% of rainforest carbon offset credits offered by Verra offered little or no climate or environmental value. The Guardian article on the investigation gives more detail about the findings, but essentially projects that’s qualified to offer carbon credits under Verra’s VCS either over emphasized the threat to existing forest, failed to provide or overemphasized climate benefit, or failed to prevent deforestation. Major companies have invested in credits provided by Verra to make net zero or climate neutral claims for their products or to simply reduce their impact on the climate. Some companies investing in Verra’s carbon credits include oil and gas companies and airlines.
Verra’s response to the Guardian article disputed the claims that carbon credits are being over issued and conducted its own review of the investigation methods, concluding the not suitable or sufficient to assess projects which reduce emissions from deforestation and forest degradation (REDD). The claim is based primarily on the assertion that the scientific research used to underpin the investigation do no adequately account for pre-project conditions and therefore do not account for individual project baselines.
Why is this situation important? Lets start with the negatives which include (but not limited to):
1. If the investigation is in anyway accurate it is clearly a backward step for emission reductions and environmental protection.
2. It questions the integrity of other forest based initiatives which could lead to a reduction of private investment in environmental projects.
3. The validity of carbon neutral claims are brought into question.
4. Increases confusion and complexity in an already complex voluntary carbon market.
And now for the positives which include (but not limited to):
1. A free press and investigative journalism play and important role in keeping organizations accountable to international climate goals.
2. It emphasizes the need for organisations to reduce emissions as close to zero as possible instead of relying on offsetting.
3. It demonstrates the importance of robust and transparent sustainability accreditation and auditing processes.
4. It highlights the importance of private investment in supporting public finance of environmental and climate projects.
Carbon offset credits, especially those from forest based programs, are still important to global climate goals. A great deal of caution is required to prevent an over reliance on carbon offsetting and yet a great deal of support is required to ensure that offsets actually provide the intended benefits to the climate, the environment, and communities.