The appeal is obvious: for a few pounds, we can – in theory – cancel out the damage we do to the planet by protecting a threatened rainforest.
We can fly and eat “carbon neutral” and even offset CO2 emissions from our breath, making our entire existence “carbon neutral” under the logic of offsetting. If only life were so simple.
These claims – which bombard us in the supermarkets, online and on television – are often based on carbon credits approved by Verra, the world’s leading certifier for the $2bn (£1.6bn) voluntary offsets market. Disney, Gucci and Shell are just some of the names that use them, and they are presented as a “nature-based solution” to the guilt that many of us feel about our emissions and contribution to biodiversity loss.
Now, after the Guardian’s joint investigation into the rainforest credits, which indicated that many of them are worthless and often do not prevent any deforestation at all, the non-profit is making major changes to its rainforest offsets programme. It has committed to phasing out the current methods for producing credits by July 2025 at the latest. This had been promised for a long time, but we now have an end date.
We should be cautious about the reforms and what they mean for ethical shoppers who want to do the right thing. Insiders in the carbon offsetting industry – which is unregulated – paint a picture of bizarre world that brings together the oil and gas industry, conservationists, governments, financiers, Silicon Valley and UN climate conferences.
Insiders say conflicts of interest are rife and experts say scandals show the industry is at the beginning of a “credibility revolution”, a reference to an economic movement that applied empirical methods to the social sciences and was recognised with a Nobel prize in 2021.
“A credibility revolution that began in the late 80s has swept through social sciences. That has unearthed new findings about what the impacts of welfare are on people’s willingness to work, environmental regulations, tax quality and a whole range of things. Now that credibility revolution is arriving at the door of carbon offsetting and the news isn’t very encouraging,” said Michael Greenstone, a professor at the University of Chicago and Barack Obama’s former chief economist, who researches the impact of environmental policies.
Methods for measuring impact, which is crucial to offsetting’s “cancelling out” logic, are used all the time in other fields. We can estimate the impact of the Covid-19 vaccines, German reunification and ETA terrorist attacks. Now, they are being applied to conservation and were used in the studies the Guardian analysed for its investigation.
There are big questions about the ability of offsetting to play even a minor role in climate change and biodiversity loss mitigation, and regulators in the EU, US and UK are started to take note. Offsetting projects involving whales and elephants could soon join their rainforest protection counterparts but there could soon be strict new rules about what businesses can say is “carbon neutral” using offsets in many countries. Whatever is allowed, we do not have time to waste on ideas that do not work.
Guido Imbens, one of the Nobel laureate economists recognised in 2021, reviewed the Guardian’s analysis after Verra and a carbon credit marketing claimed the studies were flawed and unable to capture the true impact of the projects.
He said he found nothing that took away from the overall conclusions of the investigation, but cautioned that estimating how the world would have been – which is what the carbon projects attempt to do – is inherently complicated and sensitive to analytical choices.
We will have to live with this uncertainty if offsetting is scaled up, and it will never be a substitute for cutting emissions. Better data on forests and deforestation, and embracing modern methods for estimating impact, must be the way forward if carbon markets are going to be scaled up.
We also must not forget that the investigation found evidence of forced clearances at one projects. Indigenous leaders across the Amazon warned that they were being targeted by “carbon pirates” trying to cash in on the offsetting goldrush.
We desperately need a system that protects rainforest and human rights at its heart. Offsetting is not the only tool we have available. Time is running out to get this right.
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