The carbon offsets market tumbled by over 60% last year, amid reports that offset schemes have little environmental worth and linking offset projects to alleged breaches of human rights.
Research by Ecosystem Marketplace, a nonprofit focused on the carbon market, found the carbon offsets market was down 61% from $1.9bn (£1.5bn) in 2022 to $723m in 2023.
The report reads: “Disclosures from market participants indicate that negative media coverage and a pause in purchasing as buyers awaited guidance from integrity initiatives were key reasons for a pullback in buyer investment.”
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It also found that offsets generated by schemes protecting the forestry and land-use category lost 62% of their value over the year.
The report said: “2023 saw a rash of negative media coverage of REDD+ (Reducing Emissions from Deforestation and Forest Degradation) which likely contributed to the decline; many credit buyers may have also paused purchasing as they awaited updates to a widely used project methodology.
“The pullback largely affected project developers in Asia, Latin America, and the Caribbean, where the majority of these projects are located.
The research comes amid evidence that carbon credits don’t cut global warming while linking carbon offset projects to alleged human rights breaches.
