Oil and gas supermajor BP has been found to have taken advantage of Mexican communities by purchasing their carbon credits at an obscenely low price, as stated in a report published by Bloomberg Green this month.
The report said that BP had been buying carbon credits from Mexican villagers in the poorest areas of the country at only $4 per ton of CO2, which is less than half of the true market price.
Apparently, the residents participating in the local carbon credit program were unaware of the actual price of the credits they were selling, which has undermined the carbon credit market’s viability as a means of helping companies adopt more sustainable practices.
As Bloomberg Green found, BP has purchased roughly 1.5 million offsets from 59 communities dispersed over 500,000 acres of land.
Some of these communities had been hard at work for many years struggling to preserve existing forests and replant new ones before they received their first payment, which turned out to be equal to one week’s worth of work in other programs.
The deal was referred to as a ‘sham’ and ‘rip-off’ in the report, whereas even former BP executive Charlie Donovan also acknowledged how extremely low the price of $4 per ton of CO2 is.
In fact, the whole purpose of carbon offsets is largely to provide an incentive for local communities to engage in reforestation and conservation efforts in areas that would otherwise be used for cattle and farming.
Hence, paying these landowners and small communities a ‘pittance’, as in the case of the BP controversy, would render such programs useless.
And instances like these have been the main reason for criticism of carbon credits, especially as they allow major polluters to continue emitting vast amounts of carbon dioxide with no intention of transitioning to greener practices.
BP has reportedly agreed to increase the amount it will pay communities in Mexico in response to the report by Bloomberg Green, although the new price has not yet been specified.