Planting trees or protecting tropical rainforests has become a popular tool for companies to reduce their carbon emissions and declare their commitment to the environment. However, recent scandals have cast a shadow over the carbon credit industry, revealing a landscape teeming with opportunities for greenwashing. Walt Disney, JPMorgan Bank and other major corporations have been accused of purchasing carbon credits from forest protection projects in areas that were not actually at risk of deforestation.
Separately, a company responsible for managing 600,000 hectares of land in the United States has reportedly earned $53 million over the past two years from carbon credits that have not significantly changed its forest management practices.
None of these projects sequestered more carbon than would have been absorbed by trees through photosynthesis in a business-as-usual scenario.
Nevertheless, companies count the resulting carbon credits toward their own reduction goals, allowing them to offset emissions in the carbon accounting of their operations.
World leaders and experts will gather in Gabon’s capital, Libreville, on March 1 and 2 for the One Forest Summit.
Co-chaired by France and Gabon, the meeting will focus on improving financial instruments aimed at protecting the world’s forests.
Carbon credits are already widely used. According to various estimates, the tons of CO2 they represent (with one credit equal to one ton) could increase tenfold to nearly two billion tons by 2030.
“The risky aspect of the carbon credit market is that it is not self-regulating,” said César Dugast of French environmental consultant Carbon4 in an interview with AFP.
“It is in everyone’s interest to maximize the amount of carbon credits. This enables project developers to spread the total cost over the maximum number of credits, thereby offering a lower cost to buyers.
“Even certifiers have an interest in the dissemination of projects,” he added.
In mid-January, The Guardian, Die Zeit and an NGO revealed that more than 90 percent of forests certified by Vera, the leading verifier for forest protection under the United Nations Program to Reduce Deforestation and Forest Degradation (REDD+) The projects were likely “ghost credits” that did not represent “real emissions reductions”.
Vera’s CEO, David Antonioli, dismissed these findings, arguing that “REDD projects are not some abstract concept on a piece of paper; They represent real projects on the ground that deliver life-affirming benefits.”
Carbon credits under debate
Since the story broke, the price of nature-related carbon credits has plummeted, according to Paula Vanlaningham, global head of carbon at S&P Global.
The disclosure of REDD+ projects has sparked widespread debate about the entire carbon credit system.
“Are the projects a good vehicle for carbon finance in a way that actually leads to a fair transition? Probably both yes and no,” she told AFP.
Several independent rating agencies have defended their methodology by stressing the critical need for funding projects that protect nature.
“The first issue we look at is additionality: would the project have happened in the absence of carbon markets?” Donna Lee, co-founder of Calyx Global, an independent rating agency for carbon projects, told AFP.
“We then look at how the baseline was set and what would have happened in the absence of the project.”
The main issue with initiatives to stop deforestation is the challenge of proving that without the money, deforestation would have occurred.
“We look at deforestation patterns in the area … a lot of scientific studies show that there are things like roads, population, distance from the forest edge, which are often associated with deforestation,” Lee said .
Above all, companies buying these credits should be “more transparent”, clearly indicating where the credits are obtained and how they reduce their own emissions, she said.
“We need to move from a mindset of contributing to a mindset of compensating,” said Dugast from Carbon4.
In other words, companies financing forests to offset carbon emissions is acceptable, but not a loophole to avoid reducing their own emissions.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)