A new investigation conducted by SourceMaterial, the Guardian, and German weekly Die Zeit has revealed that 94% of the carbon credits issued by the world’s leading carbon standard in the offsets market, Washington, DC-based Verra, are likely to be “phantom credits” and do not represent genuine carbon reductions. These “avoided deforestation” credits have been bought by companies such as Disney, Shell, and Gucci to offset their emissions, but are now being called into question. The investigation used satellite data to check the results of 29 Verra-certified rainforest offset schemes and found that only 6%, or 5.5 million of the 95 million carbon credits, were real emission reductions. SourceMaterial notes that 95 million actual carbon credits would be enough to balance the annual emissions from 25 coal-fired power plants or burning 220 million barrels of oil.
The problem with the rainforest carbon schemes seems to be that they overestimate the threat to the forests involved by an average of 400%, according to a 2022 study by the University of Cambridge that has not yet been peer-reviewed. Verra objects to these findings, saying that satellite data and standardized approaches cannot capture what is happening on the ground. Verra also takes 10 cents from project developers for every credit it verifies, and the third party auditors are frequently vetted by Verra itself.
Julia Jones, a Bangor University professor of conservation science and co-author of the Cambridge study, said that the carbon credit system needs urgent correction and renovation. Thomas Crowther, professor of ecology at ETH Zürich and co-chair of the United Nations Decade on Ecosystem Restoration, added that transparency remains a key challenge, and it is critical that we use the best available scientific approaches to ensure the accountability of environmental commitments at scale.
The news investigation into carbon credits issued by Verra has sparked calls for rigour, transparency, and accountability in the carbon credit process. The investigation found that 94% of the non-profit’s rainforest offsets are likely to be “phantom credits” and do not represent genuine carbon reductions, with the problem being that they overestimate the threat to the forests involved. Verra objects to these findings, and the company also takes 10 cents from project developers for every credit it verifies. Experts have called for the carbon credit system to be urgently corrected and renovated, with transparency being a key challenge. Companies and citizens need to be able to support projects they can trust, and it is essential that the best available scientific approaches are used to ensure the accountability of environmental commitments at scale.