As of last year, more than a third of the world’s largest publicly traded companies had set targets to reach net zero carbon emissions, up from a fifth in December 2020. But a dirty little secret lies behind most net zero commitments: Companies are buying carbon offsets to meet their goals — paying for absolution just like pre-Reformation Catholics buying Indulgences to offset their sins. Under the law, the U.S. Federal Trade Commission has the power to hold companies liable for marketing that harms consumers’ health or wealth by misleading them into buying a product or service based on a false or deceptive claim. The FTC just closed public comment on how to amend its classic Green Guides in light of new market realities.
Yet another report has cast doubt on the accuracy and reliability of the carbon credits companies and individuals purchase to offset their climate-polluting emissions. The first-of-its-kind peer-reviewed study, published in Frontiers in Forests and Global Change Tuesday, looked at almost 300 projects that made up 11 percent of the carbon credits on offer to date. It found that methods for calculating the carbon credits were often in conflict with scientific best-practices, which increased the risk of “significant over-estimation” of the amount of carbon a project might keep from the atmosphere. The report comes around two months after a major investigation found that 94 percent of the forest offset credits verified by top carbon credit certifier Verra did not truly offset any emissions.
Are carbon offsets a useful tool on the road to net zero or simply another form of greenwashing? A new investigation from The Guardian, Die Zeit and SourceMaterial leads heavily toward the latter conclusion. The report, published Wednesday, found that more than 90 percent of the rainforest offset credits offered by top carbon standard Verra are actually what The Guardian called “phantom credits” that don’t actually remove carbon dioxide from the atmosphere. “The implications of this analysis are huge,” Barbara Haya, who leads the Carbon Trading Project at the University of California, Berkeley, told SourceMaterial. “Companies are making false claims and then they’re convincing customers that they can fly guilt-free or buy carbon-neutral products when they aren’t in any way carbon-neutral.”
Many of the companies promising “net-zero” emissions to protect the climate are relying on vast swaths of forests and what are known as carbon offsets to meet that goal. On paper, carbon offsets appear to balance out a company’s carbon emissions: The company pays to protect trees, which absorb carbon dioxide from the air. The company can then claim the absorbed carbon dioxide as an offset that reduces its net impact on the climate. However, our new satellite analysis reveals what researchers have suspected for years: Forest offsets might not actually be doing much for the climate. When we looked at satellite tracking of carbon levels and logging activity in California forests, we found that carbon isn’t increasing in the state’s 37 offset project sites any more than in other areas, and timber companies aren’t logging less than they did before.
Fifteen years ago, as Valentine’s Day approached, a trio of entrepreneurs took to the streets of Britain selling a brave new idea. Bearing heart-shaped helium balloons and red red roses, they told passers-by about their new company, cheatneutral.com. “What we do is cheat offsetting,” they say, in what became an early viral YouTube video. “So, if you’re in a relationship and one of you does something you probably shouldn’t have, then you can come to us, and pay us a little bit of money.” To offset the infidelity, the company would invest it in a couple who promise to be faithful. The launch got widespread, shocked news coverage. The firm’s founders were invited onto broadcast media across the world to justify this nonsense. It was, of course, a stunt. Carbon offsetting was, at the time, a relatively new idea.
Governments, companies and sometimes entire sectors are increasingly proposing to use carbon offsets in response to the deepening climate crisis. In theory, offsetting allows organisations to compensate for their own emissions by paying towards low-carbon projects elsewhere, but the practice has been mired in scientific problems and scandals, and it has been widely critiqued in the social sciences. With the UK government now seeking to turn London into a global hub for the carbon offset trade, it’s worth asking why it is still so prominent. My research on what I have called the fantasy of carbon offsetting helps explain the situation. Carbon offset credits are created when a standards organisation declares that a project has reduced or avoided greenhouse gas emissions (a solar farm that “replaces” a coal power plant, say) or instead has removed carbon dioxide from the atmosphere and stored it somewhere (by planting lots of trees, for instance).