A new investigation from the Guardian is questioning whether it is worth having carbon offsets at all. The independent media the Guardian has led a nine-month investigation together with the German weekly Die Zeit and SourceMaterial – a non-profit investigative journalism organization, that looks into the validity of forest carbon offsets approved by Verra – the world’s leading provider.
The research shows the forest carbon offsets issued by Verra are “largely worthless and could make global heating worse”, as expressed by the Guardian. The analysis of a significant percentage of the carbon offsets projects shows that more than 90% of the issued rainforest offset credits, which are among the most commonly used by companies, are likely to be “phantom credits” and do not represent genuine carbon reductions.
Verra is a nonprofit organization that operates a number of leading environmental standards for climate action and sustainable development. It is a leader in setting carbon standards in the voluntary carbon market, and has created the world’s leading carbon crediting program. Verra’s verified carbon standard (VCS) has issued more than 1bn carbon credits so far since 2009 when the company was created.
The Guardian’s research puts a serious matter under scrutiny and brings up the issue of the worthiness of having carbon offsets one more time. More doubts in the past with several other carbon offsets schemes have been raised repeatedly over whether they are managed properly and whether they lead to actual emissions reductions as they are advertised to. Other investigations into carbon offsets schemes are also questioning their efficiency and point to evidence the systems are largely flawed and don’t work.
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The Guardian’s investigation is based on a new analysis of scientific studies of Verra’s rainforest schemes, draws conclusions on dozens of interviews and on-the-ground reporting with scientists, industry insiders and Indigenous communities.
What Do The Findings Show?
According to the Guardian, two studies show only a handful of rainforest projects of Verra had evidence of deforestation reductions, with further analysis indicating that 94% of the credits had no benefit to the climate.
The investigation shows the findings of an analysis of a 2022 University of Cambridge study, that the threat to forests had been overstated by about 400% on average for Verra projects. Gucci, Salesforce, BHP, Shell, easyJet, Leon and the band Pearl Jam were among dozens of companies and organizations that have bought rainforest offsets approved by Verra for environmental claims.
It also claims that human rights issues are a serious concern in at least one of the offsetting projects. A visit by the Guardian to a flagship project in Peru was said to show videos of residents showing their homes being cut down with chainsaws and ropes by park guards and police.
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The investigation took a team of journalists to analyze the findings of three scientific studies that used satellite images to check the results of a number of forest offsetting projects, known as Redd+ schemes.
Although a number of studies have looked at offsets, there are only three known to have attempted to apply rigorous scientific methods to measuring avoided deforestation.
The journalists analyzed the results obtained by the studies and indicated that about 94% of the credits the projects produced should not have been approved. Examined credits from 21 projects had no climate benefit, seven had between 98% and 52% fewer than claimed using Verra’s system, and one had 80% more impact, according to the findings.
Included in the research are also the findings of two different groups of scientists – one internationally based, the other from Cambridge in the UK, who looked at a total of about two-thirds of 87 Verra-approved active projects. Some of the projects were left out as the researchers felt there was not enough information available to fairly assess them.
The findings showed eight out of 29 Verra-approved projects had evidence of meaningful deforestation reductions. A separate study by the University of Cambridge looked at 40 Verra projects and found that while a number had stopped some deforestation, the areas were extremely small. Just four projects were responsible for three-quarters of the total forest that was protected.
The investigation analyzed these results more closely and found that, in 32 projects where it was possible to compare Verra’s claims with the study finding, baseline scenarios of forest loss appeared to be overstated by about 400%.
Just three projects in Madagascar have achieved excellent results and have a significant impact on the figures. If those projects are not included, the average inflation is about 950%.
All of these findings from various studies and analyses stated by the Guardian could represent serious evidence against the claims that carbon offsets reduce emissions with the amounts stated they do, therefore a lot of money could be going for emissions reductions that are not ever realized.
Verra Response To The Guardian Research
Verra responded to the investigation, saying it is incorrect and questions its methodology. They replied saying their work since 2009 has allowed billions of dollars to be channeled to the vital work of preserving forests.
One of the main arguments of Verra that explains the difference in numbers with the Guardian’s investigation, is that the figures are based on studies using “synthetic controls” or similar methods that do not account for project-specific factors that cause deforestation.
In other words, the investigation doesn’t account for some drivers of deforestation that are project specific and therefore it miscalculates the impact of these verified projects.
According to Verra, it develops and continually improves methodologies based on the best-available science and technology through rigorous consultations with many academics and experts which ensures that project baselines used to calculate carbon credits are robust and a credible benchmark against which to measure the impact of the projects. You can read Verra’s response to the investigation on its website here.
Criticism Of The Investigation
The article has caused shockwaves in the industry and received widespread coverage from other global media outlets. But it has also sparked criticism of the scientific approach to its conclustions. One of the more detailed breakdowns of what is wrong with the Guardian’s article came from Everland, a company that operated with REDD+ credits.
According to them the investigation didn’t compare like-for-like projects, differences in matching criteria, uncertainty of the underlying data, lack of a peer review and misrepresenting a key reference.
Sylvera Response To The Investigation
Voluntary carbon market Sylvera also responded to the Guardian’s investigation. They say that it is correct to some extent but it understates the importance of the carbon offsets. The company provides an in-depth analysis at its “State of Carbon Credits 2022” report, published in November last year. It looks into >85% of REDD+ credits on the market.
Sylvera found that 31% of the projects (representing 143M issued credits) that it has rated are, in fact, high quality (falling in our Tier 1 category of ratings). According to the company, 31% “isn’t great, but it’s a lot better than 6% and demonstrates there are good quality projects available to buyers today.”
Sylvera’s report also showed that the remaining two-thirds of projects it has rated are of mixed quality, with 25% being effectively junk. The company supports the Guardian saying it has accurately called out some of these bad projects such as Madre De Dios.
Carbon Trade Exchange Reaction
Carbon credit exchange CTX also reacted to the investigation in a newsletter, commenting that: “Buyers must know exactly what they are buying, what they are paying and choose wisely – and only Carbon Trade eXchange (CTX) can guarantee a fully open and transparent platform to do that.
As a true global SPOT market CTX has credits listed from multiple Credit Standards simultaneously, so buyers can choose carbon credits from UNFCCC CDM CERs, Gold Standard, Verra VCS, BioCarbon or Universal Carbon Registry (UCR), and soon ITMOs.
CTX ensures that every credit listed is escrowed in the relevant Registry, so there is no risk for the buyers of non-delivery or double selling. With the buyers required to be ‘in funds’ on CTX, there is no counter-party risk involved.
But it’s the buyer’s choice, and if you became concerned over certain project types or Credit Standards, we offer alternatives.”
