The global market for voluntary carbon offsets – the removal of emissions of carbon dioxide or other greenhouse gases in order to compensate for emissions made elsewhere – has grown rapidly in recent years.
Countries established the REDD+ framework to protect forests as part of the 2015 Paris Agreement. REDD stands for 'reducing emissions from deforestation and forest degradation in developing countries'. Many of these schemes generate carbon credits by investing in the protection of parts of the world's most important forests – from the Congo to the Amazon.
But an analysis of 18 major carbon offset projects matched with sites that offer a real-world benchmark for deforestation levels found that more than 60 million carbon credits came from projects that barely reduced deforestation, if at all. Of a potential 89 million credits from these offset schemes, only 5.4 million (6 per cent) were linked to additional carbon reductions through preserved forest.
This means that many of the credits bought by companies to balance out emissions were not tied to real-world forest preservation as claimed.
The study found that millions of carbon credits are based on crude calculations that inflate the conservation successes of REDD+ projects. They typically take historical deforestation averages or trends, sometimes from over a decade ago, across a wide region that usually includes the REDD+ site.
Consequently, many tonnes of greenhouse gas emissions considered offset by trees that would not otherwise exist have only added to the planetary carbon debt.
According to the researchers, the booming trade in carbon credits has led to a situation where buyers have no way of distinguishing quality, so some sellers flood the market with bad products, leading to a breakdown of trust and ultimately market collapse.
"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," said Professor Andreas Kontoleon, senior author of the study.
"These carbon credits are essentially predicting whether someone will chop down a tree, and selling that prediction. If you exaggerate or get it wrong, intentionally or not, you are selling hot air."
The overestimations of forest preservation have allowed the number of carbon credits on the market to keep rising, which in turn suppresses prices.
Kontoleon added: "Potential buyers benefit from consistently low prices created by the flood of credits. It means that companies can tick their net zero box at the lowest possible cost."
