New standards should bring greater scrutiny of carbon offsets and give buyers confidence their money is helping protect the environment, leading figures in the carbon credits market have insisted, after an investigation by the Guardian revealed widespread problems with offsetting.
Annette Nazareth, chair of the Integrity Council for the Voluntary Carbon Market, which sets nonbinding principles to which sellers of carbon credits can sign up said the body was working on new standards that should reassure consumers.
“We are working intensively to set a definitive global threshold standard for high-integrity carbon credits, based on solid science and clear, measurable, verifiable data that will respond to market concerns and give buyers confidence that they are funding projects that make a genuine, positive impact,” she told the Guardian.
Lord Stern, one of the world’s leading climate and development economists, told the Guardian: “There is a potentially important role for voluntary carbon markets that allow companies to offset residual emissions that they are unable to avoid as part of a strategy to reach net zero emissions.
“These markets could channel significant investment into both natural and artificial ways of removing carbon dioxide from the atmosphere. But these markets will only work properly if the credits that are traded are high-quality and both participants and external observers can be confident that they result in real removals of carbon dioxide.”
Earlier this week, the Guardian revealed that rainforest carbon credits approved by the world’s leading provider were “90% worthless”. The company producing the credits strongly disputes the findings. Companies including Disney, Lavazza and Gucci are among those that have bought this kind of credit, in order to offset the impact on the climate of their operations.
The revelations have rocked the global carbon “voluntary” carbon markets, so-called because they are not regulated by governments. The markets are supposed to govern themselves, but there is a profusion of standards and claims.
Carbon credits are awarded to projects such as conserving rainforests from logging, preserving natural carbon sinks or reducing greenhouse gas emissions in other ways, such as funding wind or solar farms. They are frequently sold to companies who use them to cancel the impact of their emissions and claim carbon neutrality.
The Guardian found numerous problems in the market, including offsets that carried little or no environmental benefit, and people who said they had their homes torn down to make way for projects. Projects that aim to conserve areas of forest often claim that the trees would be prey to loggers without their protection, but this is hard to prove.
However, many climate experts have also said that carbon markets are needed. There are few ways of generating the cash needed to reduce emissions and preserve the world’s remaining carbon sinks, and governments are unlikely to provide the hundreds of billions of dollars needed to do so.
Selling carbon credits could provide an income stream for local people and an incentive to keep forests standing rather than logging them or using them for agriculture or plantations.
Mark Carney, former governor of the Bank of England, has championed carbon markets. He told the Cop15 biodiversity conference in December: “We must rapidly progress efforts to bring both high integrity and high volume to voluntary carbon markets so that carbon credits can fulfil their potential of reducing emissions and supporting biodiversity, mitigation and adaptation objectives … The carbon market could deliver huge co-benefits for the planet, Indigenous peoples and local economies.”
Nazareth said the new, more stringent, standards that should come later this year would provide reassurances to buyers. “Once we have issued high-integrity labels, we will oversee the market,” she promised. “We will conduct spot checks to ensure credits with high-integrity labels meet the criteria, monitor concerns and complaints, and engage with programmes to understand how they are dealing with these issues. As with any regulatory process, we will learn lessons and use these to continually develop our core carbon principles.”