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Home Environment

Why Carbon Credit Schemes May Not Work as Intended

Carbon offsetting schemes — programs that allow individuals and companies to balance their carbon footprints by investing in environmental projects — are growing in popularity. However, a new report has called into question their effectiveness

byDavid Bass
September 18, 2023
in Environment
carbon credits
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Forests are an essential part of our planet’s ecosystem and play a crucial role in maintaining the balance of nature. Often described as the lungs of the planet, they generate oxygen and absorb C02, and their preservation is vital in the fight against climate change. Forests are also one of the elements at the heart of carbon credit schemes. How so? To understand why, we need to take a couple of steps back and consider the role of deforestation in climate change.

In recent times, deforestation through agriculture, poorly planned infrastructure and illegal logging have led to a situation of worrying and rapid depletion of the world’s forests. It is estimated that in 2019 alone, the tropics lost close to 30 football fields worth of trees every single minute.  

In the words of David Attenborough, renowned British naturalist and broadcaster:

“Worldwide, we have now destroyed over half of the forest that once flourished on our planet. Not only are we losing the animals that once lived on them, we’re also changing the climate of the entire globe.” 

With concerns such as these prevalent across society, it’s easy to see why many businesses are turning to companies that offer ways to offset their activities that cause climate change by schemes aimed at financing the sustainability of forests and the communities that live within them. 

The Verra issue

One major project that offers to do just that is Verra. On its website, it describes itself as “The world’s leading greenhouse gas crediting program”.  They run a rainforest carbon credit system, known as Redd+.  Redd stands for Reducing emissions from Deforestation and forest Degradation. The plus signifies additional forest–related activities that protect the climate, such as sustainable management of forests and enhancement of forest carbon stocks. 

Through such schemes, companies seek to ‘cancel out’ their greenhouse gas emissions by paying for greenhouse gas removal or reductions elsewhere, often in developing countries. 

However, new research has called into question the validity of such efforts. 

In a report based on the findings of 14 Berkeley researchers funded by the Non-Governmental Organisation (NGO) Carbon Market Watch found that the schemes may not be as effective for helping to protect the planet as they appear. 

The alleged issue comes with the way that rainforest protection carbon credits are generated. The researchers outlined some worrying issues, and as Barbara Haya, the director of the Berkeley Carbon Trading project, put it :

“Our research shows that the project type with the most credits on the voluntary carbon market avoided deforestation, generating highly inflated credits that put forest communities at risk. An entirely different approach is needed to reduce deforestation and cut emissions.”


Related Articles: Carbon Offsets: What Are ‘Phantom Credits’? | Are Carbon Offset Schemes a Pretext for Big Polluters |  Why Do Carbon Offsets Not Effectively Offset Carbon? | The Voluntary Carbon Market: Unregulated and Useless?

In other words, the carbon credit schemes that appear the most successful providing “inflated credits”, i.e. the largest number of credits implying a “highly inflated” environmental impact – yet they only include fully-forested areas, thus entirely by-passing the problem of deforestation. One may well ask why such “projects” should even be considered in any carbon credit scheme? 

Other related issues include:

  • Some projects fail to provide safeguards for vulnerable forest communities;
  • The risk of displacing deforestation elsewhere is ignored.
  • The project auditing system also failed to apply Verra’s own rules on generating credits

The report concludes that such issues render the scheme not fit for purpose, and there should be more focus on getting money to where it is needed most, rather than generating as many credits as possible.

What makes this conclusion particularly worrying is that they apply to a type of project, the REDD+ projects with the most credits on the voluntary carbon market, amounting to about a quarter of all credits to date.

In short, if the report authors are right, a quarter of all carbon credits schemes appear compromised.  

In response to these criticisms, Verra stated that its Verified Carbon Standard (VCS) Program has reduced or removed nearly one billion tonnes of carbon and other GHG emissions from the atmosphere:

“There are always critics, and their voices are heard within the consultations, but the process is robust and transparent. It is designed to deliver ever–higher standards and integrity.  We are proud of our work on REDD, which has been vital in addressing deforestation, restoring biodiversity, and delivering on governments’ climate commitments under the Paris Agreement.”

Is there a future for Carbon offsetting schemes?

So what is the future of such schemes that promise to allow businesses wishing to offset their carbon emissions by participating in environmentally friendly activities? 

Gilles Dufrasne, policy lead on global carbon markets for Carbon Markets Watch, certainly does not hold back on his opinion of the current system:  “Offsetting should be axed. It cannot work in its current form, and carbon markets must evolve into something different. The focus should be on getting money to the right place, rather than getting as many credits as possible,” he said.

What are the reactions to these findings?

Although the findings of the report are shocking with potentially massive implications for those involved with the carbon credits system, many environmental groups have long pointed to serious flaws and claim the system has been, “fraught with scandals”. In an article on the website Friends of the Earth Europe, Brook Riley, campaigner for Friends of the Earth Europe comments:

“The ongoing love affair with carbon trading is obstructing real action on climate change. Paltry CO2 emissions caps and offsetting loopholes are cancelling out the emissions reductions science and climate justice demand. EU Environment Ministers must jointly call for an emissions target of at least 40% by 2020, and ensure that these cuts are made domestically.”

On its website Greenpeace point to similar issues with the whole concept of carbon offsetting.

“The big problem with offsets isn’t that what they offer is bad – tree planting or renewable energy and efficiency for poor communities are all good things – but rather that they don’t do what they say on the tin. They don’t actually cancel out – er, offset – the emissions to which they are linked.

Offsetting projects simply don’t deliver what we need – a reduction in the carbon emissions entering the atmosphere. Instead, they’re a distraction from the real solutions to climate change.”

Although companies such as Verra continue to defend the validity of their efforts, it does seem that the Berkeley report is backing up opinions already held by many environmental experts that carbon offsetting is prone to exploitation and doesn’t really address the fundamental issue of carbon emissions into our atmosphere. 


Editor’s Note: The opinions expressed here by the authors are their own, not those of Impakter.com — Featured Photo Credit: Chennawit Yulue.

Tags: #carbonneutralityAmazon deforestationCarbonEmissionsclimatechangedeforestationEnvironment
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David Bass

David Bass

David Bass is a Political Journalist. Having studied at both the London College of Print (now the London College of Communication) and later the Press Association’s main UK office in Victoria, London, David went on to work for The Guardian Local Paper Series, which has newspaper titles covering the London area. David currently works in TV Production for the company Collaborative Media and the multimedia platform Executive TV, where he helps with interviews, scriptwriting, press releases and production duties. David is passionate about covering environmental issues and the Sustainable Development Goals (SDGs) of the United Nations. Outside of work, he is interested in film, art and culture and is a committed Christian.

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