A leading corporate strategy for battling climate change is ‘hot air,’ study finds

A popular method for reducing carbon emissions may be little more than “hot air,” a new study has found.

In past years, financial markets have done increasingly brisk business in “voluntary carbon offsets,” projects that ostensibly capture greenhouse gas emissions — or prevent them from being released into the atmosphere.

One of the leading forms of offsets — used by many leading corporations — is “forest carbon offsets.” 

Under such programs, companies subsidize forests which absorb the equivalent of the companies’ carbon emissions as they grow — at least in theory.

The study published Thursday in Science offers strong evidence that the theory doesn’t live up to the practice.

“Carbon credits provide major polluters with some semblance of climate credentials,” co-author Andreas Kontoleon of Cambridge University said in a statement.

But he noted that the international team had found “that claims of saving vast swathes of forest from the chainsaw to balance emissions are overblown.”

The scientists audited 18 projects in five equatorial forest countries — Tanzania, Peru, Colombia, Cambodia and the Democratic Republic of Congo — which had all been billed as offering the highest-standard carbon offsets.

These credits, Kontoleon said, amounted to bets: that without a polluting company’s (or individual’s) spending on a forest carbon project, that forest would have been destroyed.

“These carbon credits are essentially predicting whether someone will chop down a tree, and selling that prediction,” Kontoleon said.

If offset sellers “exaggerate or get it wrong, intentionally or not, [they] are selling hot air,” he added.

The team compared those 18 sites to similar but unprotected sites around the world. If those sites were cleared, but the protected offset-deriving sites were not, they theorized it would show those credits were valid.

But that wasn’t what they found. Of the 89 million offset credits generated by these “schemes,” about 94 percent came from products that had done less than developers claimed to reduce deforestation — meaning the offsets weren’t offsetting as much carbon as the sellers had claimed.

And 68 percent of credits — more than two-thirds — had been generated by projects that barely reduced deforestation at all.

“Carbon credits provide major polluters with some semblance of climate credentials. Yet we can see that claims of saving vast swathes of forest from the chainsaw to balance emissions are overblown,” Kontoleon said.

Delta is facing a class-action lawsuit that argues its marketing as “the world’s first carbon-neutral airline” — a claim based on its purchase of forest carbon offsets — are “manifestly and provably false.”

That suit followed a January investigation by several European newspapers, which found that at least 90 percent of the forest carbon offsets claimed by leading certifier Verra did nothing to avert deforestation. Verra has disputed the investigation’s findings.

And in March, Bloomberg reported that a leading offset vendor was facing allegations that it had also exaggerated its carbon-saving claims.

The Science researchers argued that these errors aren’t incidental — they reflect a structural problem with offsets.

“There are perverse incentives to generate huge numbers of carbon credits, and at the moment the market is essentially unregulated,” Kontoleon said..

“Watchdog agencies are being created, but many of those involved are also linked to carbon credit certification agencies — so they will be marking their own homework,” he added.

The researchers identified three other sources of error: Offset-selling companies may cherry pick their sites for regions where conservation is already likely to succeed; they may rely on misleading historical trends; or their long-term metrics may be unable to capture a sudden change in the rate of deforestation.

But in all cases, Kontoleon said, “The industry needs to work on closing loopholes that might allow bad faith actors to exploit offset markets” if it is to become a trusted marketplace.