The investigation conducted by the Guardian, Die Zeit, and SourceMaterial found that 90% of rainforest carbon offsets sold by Verra are worthless, raising issues around voluntary carbon markets and their lack of regulation. Verra has sold one billion carbon credits since 2009, each representing one tonne of carbon dioxide removed permanently from the atmosphere, with 88 countries worldwide relying on them for guidance. Businesses are concerned about the lack of regulation in the sector, as it threatens to void their claims of providing a way to be green and sustainable.
The concept of carbon offsetting can be linked back to the 1997 Kyoto Protocol, which established legally binding emissions reduction targets for the European Union (EU) and 37 other industrialised countries. This created a cap-and-trade carbon market that allowed countries that had emissions units to spare to sell this excess capacity to countries that were over their targets. This opened up the sovereign and voluntary carbon markets where companies may buy carbon credits from other countries, often developing, to offset local carbon emissions.
The UNFCCC has a carbon offset platform, where an organisation can buy carbon credits to compensate for greenhouse gases. This market is known as a “sovereign” carbon market because it is regulated by a government or a regional inter-governmental entity such as the EU. The “voluntary” carbon markets (VCMs) are supposed to be self-regulating and are favoured by consumers looking for ‘greener’ options. Verra is a non-profit that manages and develops carbon offset standards, including the Verified Carbon Standard (VCS). However, Verra faces criticism of having massively oversold carbon credits.
The Integrity Council for the Voluntary Carbon Market (ICVCM) are aiming to bring in their own set of voluntary standards. The ICVCM has an expert panel made up of twelve carbon market experts, supported by eleven subject matter experts in topics ranging from carbon sequestration science to the rights of indigenous peoples and local communities. Following the implementation of the CCPs, high-value carbon credits will be issued a CCP label. The matter is also expected to be on the agenda for COP28, having been deferred from COP27.
Carbon offsetting has been a contentious subject since its conception. It can provide crucial funding for renewable energy research and development, but also allows companies to greenwash their products. The lack of regulation in the sector has led to exploitation, with the Gold Standard clarifying that they do not issue REDD (Reducing Emissions from Deforestation and forest degradation) credits that Verra does. The implementation of the CCPs by the ICVCM may bring in more reliable standards, but carbon offsetting has been criticised for obscuring a true vision of the climate crisis.