In a statement released yesterday South Pole, a Swiss carbon consultancy, said it is no longer confident of the quality of carbon credits generated from the Kariba project in Zimbabwe.
“All activities related to carbon certification and carbon credits from the Kariba REDD+ project will now be the responsibility of Carbon Green Investments (CGI), and South Pole’s role as the carbon asset developer has ended,” the company said.
CGI is the owner of the project, which has issued a total of 36 million credits so far and is among the largest in the carbon offset market. This has attracted corporate buyers in the past, with global brands like Nestle, L’Oreal and Volkswagen among some of the most recognizable.
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On October 17th Verra, an organization focused on developing and enforcing standards for carbon credits, launched an investigation of the project and paused the issue of new credits from it.
The number of credits sold by the project is estimated to be between 21 and 23 million and should the project cease to operate as a protected area, this could result in an outirght cancellation of all credits issued since it began in 2011. This poses a systemic risk for the broader carbon offset market which will have to dip into its so-called buffer pool, as pointed out by Bloomberg Green.
Verra issued a statement regarding this particular risk in which it says “Critically, contrary to reporting on the issue by Bloomberg, this moment provides a demonstration of the integrity and strength of the buffer pool mechanism. The buffer pool, after all, exists to back the Agriculture, Forestry and Other Land Use (AFOLU) projects registered under the Verified Carbon Standard (VCS). Even adding up the total number of credits issued by Kariba since its inception is far less than the total buffer pool. It is noteworthy that the buffer pool can handle even this unique and extraordinary situation.”
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