Carbon creditors could lose billions, as mounting evidence highlights that many voluntary carbon offsets do not have environmental worth at all.
Carbon offsetting credits are a type of permit that allow the owner to emit a certain amount of carbon, in exchange for investing in an emission reduction project.
However, evidence from the journal Science, and reported by The Guardian newspaper highlights that there is a growing number of carbon credits equivalent to the annual emissions of Japan, which go unused.
The credits are often generated on the basis that they are contributing to projects reducing climate change, such as helping to stop deforestation, tree planting and contributing to renewable energy products in developing countries.
On top of concerns about their validity and efficacy, offsetting schemes have been linked by campaigners with human rights abuses in the past.
The news comes as investors are increasingly pulling their money away from ESG funds more widely, with data showing that UK investors pulled a record £376 million in July alone – over concerns around complexity.
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Although major brands like British Airways, Gucci, Leon and Shell use carbon credits, others have been dropping them from strategies. Nestlé recently cancelled its carbon neutral pledge.
After a previous investigation by The Guardian, alongside Die Zeit and Source Material, which revealed that credits from major scheme Verra were flawed the company said in a response that it was “disappointed” to see the publication of the article and said that the claims about Verra and other REDD (reducing emissions from deforestation and forest degradation) projects were consistently over-issuing carbon credits were “incorrect”.
The Guardian then reported that Verra was changing it’s methodology following the investigation, but Verra claimed that the “decisions were made before the Guardian’s reporting”.
Analysis by another REDD provider Everlast, published today, sung the praises of the schemes and stated that across 53 projects, an average 34.6 million tC02e per year were generated.
Some in the sustainability industry have argued that whilst carbon offsetting may not be perfect, it could help increase investment in areas such as renewable energy across the world.
