Carbon Credits Real
Carbon markets are trading systems in which companies and individuals can compensate for their greenhouse gas emissions by buying tradable credits. Each credit represents a tonne of carbon dioxide or the equivalent amount of another greenhouse gas reduced, sequestered or avoided. A credit is valid only if it is issued by a project that has been independently verified as permanently removing or avoiding emissions.
Carbon offsets can be sourced through a wide variety of projects, from forest restoration to renewable energy to clean cookstove initiatives. The most effective and high quality offsets are designed to deliver value beyond simply compensating for emissions, such as stimulating local economies, creating jobs, enhancing health, improving education, countering inequalities or sharing new technologies to help communities move towards a low carbon future.
Many of the large corporations that have declared net zero targets use carbon.credit as part of their strategy. However, several questions have been raised about the integrity of these markets and the validity of the claims made by companies who purchase offsets to meet their net zero commitments.
Are Carbon Credits Real?
A recent study by the Guardian and SourceMaterial, an investigative journalism organisation, found that most of the carbon offsets bought by companies to meet their net zero pledges do not represent real reductions in emissions at all. The study looked at the carbon credits purchased by a number of large international companies including Starbucks, Gucci, BHP Billiton, Shell and Lavazza, as well as several smaller carbon offset providers. The research revealed that almost all the carbon credits purchased by these companies came from projects that are not yet operational or have been withdrawn from the market.
The research also highlighted problems with the methodologies used to verify carbon projects and credits. In particular, the researchers looked at a number of projects that were claimed to be reducing deforestation in China. They discovered that most of these projects, despite being labelled as ‘Renewable Energy Projects’ on the certificates, had not actually been built to generate electricity and would not have been viable without substantial government support. This highlights a problem with the current system, which relies on private verification bodies and non-governmental organisations to set standards for the quality of carbon projects, and is not subject to any regulatory oversight.
Until the verification of carbon projects improves and the issues with permanence, leakage and additionality are addressed, the integrity of the voluntary carbon market will remain in question. This in turn will have a negative impact on the credibility of the claims made by businesses that use carbon offsets to meet their net zero pledges.
If we are to meet our climate change goals, we need to focus on reducing and eliminating our unavoidable emissions as well as investing in the technology that will replace fossil fuels with renewable energy sources. This requires a comprehensive approach and one that includes both regulated cap-and-trade programs as well as the voluntary carbon market. Until these are in place, it’s important to have rigorous standards for carbon credits to make sure they do not serve as a greenwashing tool.