New evidence shows many high-profile environmental investments may not deliver promised emission cuts
June 8, 2024
According to an investigation earlier this week by watchdog Corporate Accountability and reported by The Guardian, many of the carbon-offset projects that have received investments from the world’s largest corporations are “probably junk” and “have fundamental failings.”
The investigation builds on an analysis by The Guardian and Corporate Accountability published last year, which found that $1.6 billion worth of carbon credits had been traded within the so-called “junk” projects up to that point (October 2023).
Some of these companies — a list that includes names such as Delta, Gucci, Volkswagen, ExxonMobil, Nestlé, easyJet, and Disney — have stopped using CO2 offsets as more evidence comes out that this “carbon trading” does not lead to the promised emission cuts. This comes despite the push over recent years by governments and major corporations to invest heavily in these carbon offset projects.
Carbon offsets, or the practice of carbon emissions trading, occur when greenhouse gas emitters pay for every ton of carbon dioxide produced by investing in separate environmental projects. These projects aim to reduce carbon emissions and balance out the emitters’ own pollution.
The problem, however, is that this practice allows companies to continue using fossil fuels and unsustainable supply chains, as the only required action is to invest in such carbon-emission-reducing projects through the voluntary carbon market (VCM).
Widespread investment in “junk” carbon offset projects
Corporate Accountability found that of the top 50 corporate buyers, 33 have carbon-offset portfolios of which “more than a third” are described as “likely junk.” What underlies this description is whether the promised emissions cuts would actually happen, or if the emissions were simply transferred elsewhere. These are common issues in hydroelectric dams and forestry projects.
One striking case concerned a huge forest conservation project in Zimbabwe, where emissions cuts were overestimated between five and thirtyfold, according to credit experts, as reported by Bloomberg. The project was found to not only have greatly exaggerated claims on carbon emissions but also to have simply shifted its emissions elsewhere.
Corporate Accountability’s director of research, Rachel Rose Jackson, went as far as to say that “these findings add to the mounting evidence that peels back the greenwashed façade of the voluntary carbon market and lays bare the ways it dangerously distracts from the real, lasting action the world’s largest corporations and polluters need to be taking.”
32 of these top 50 traded projects were certified by US-based non-profit Verra, the company that runs the world’s most prominent carbon registry. 28 of those 32 projects fell under the category of “likely junk” in Corporate Accountability assessment.
Separately, two out of four of the projects on the Swiss-based Gold Standard Registry (GSR)were also classified as worthless carbon credits. These two projects included a water filter program in Kenya and a kitchen stove project in Ghana, both of which promised to lead to fewer emissions and less deforestation in their respective countries.
GSR strongly rejected the methodology of Corporate Accountability and The Guardian’s investigation and disputed the findings. Moreover, Verra has since disputed these claims,citing this 2022 report and arguing that evidence suggests that these projects are indeed helping offshoot carbon emissions by effectively combating deforestation.
“The overall [new] findings align with the research on carbon credit quality which finds widespread over-crediting across many registries and offset project types including those with the most credits on the market — avoided deforestation and renewable energy,” saidBarbara Haya, director of the Berkeley Carbon Trading Project, in response to last year’s initial analysis.
The usual suspects: Fossil fuels and airlines
Fossil fuel companies and airlines have consistently been found to be among the worst emitters in the world. In what is likely a consequence of these emissions, they have also been found to be some of the largest corporate buyers of these underperforming carbon credits.
Of the 3.7 million carbon credits purchased by ExxonMobil, 49% were invested in two projects that have been assessed as worthless by Corporate Accountability’s findings. Exxon has long been one of the largest-emitting corporations in the world, despite internal company documents illustrating how company scientists accurately predicted the consequences of climate change almost 50 years ago.
ExxonMobil has affirmed its belief that carbon offsets are a “viable” way to reduce emissions and that it will continue to evaluate them.
Outside of the fossil fuel industry, the company that has purchased the most carbon credits is US airliner Delta. More than a third of Delta’s 41 million carbon credit investments were in 11 projects that, similar to Exxon, were deemed to have little merit.
This comes as Delta faces an ongoing lawsuit in the state of California, in which it is alleged that it misrepresented itself as a carbon-neutral company.
Delta states that it aims to be net-zero by 2050 through investments in sustainable aircraft fuel and more fuel-efficient aircraft. A spokesperson for the company also stated that it “has shifted away from carbon neutrality and offsets,” claiming that instead it is focused on more sustainable solutions internally.
Elsewhere in the aviation industry, 72% of easyJet’s 11 million carbon credits were found to have been invested in projects that misrepresented their claims regarding carbon offsets. In 2022, the company announced a move away from carbon-credit investments in favor of a “roadmap to net-zero,” which closely resembles that of Delta.
The Guardian revealed in a joint investigation in 2021 that large airlines, including Delta and easyJet, claimed their flights were carbon neutral by using “phantom” credits.
Despite less total investment, similar percentages of “junk” carbon offsets were found in the portfolios of companies in the automotive, fashion, entertainment and food and drinks industries.
“The ramifications of this analysis are huge,” states Anuradha Mittal, director of think tank The Oakland Institute, “as it points to systemic failings of the voluntary market, providing additional evidence that junk carbon credits pervade the market. The VCM is actively exacerbating the climate emergency.”
Despite the noble ambitions of many of these carbon offset initiatives and the large investments from corporations and governments the world over, the carbon credit market continues to face a reckoning. As the climate crisis continues to worsen, this new evidence suggests that a fundamental and systemic overhaul of how organizations aim to meet their net-zero promises is urgently required.
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This article was originally published on IMPAKTER. Read the original article.