Buying carbon credits by financing projects to protect rainforests has become a popular way for companies to claim they are carbon neutral, even though their activities generate gases that cause global warming. However, some 90 percent of credits offered by the world’s leading provider, Verra, are likely "phantom credits," said a study published on January 18 by British newspaper The Guardian, German weekly Die Zeit and SourceMaterial, a nonprofit investigative journalism organisation.
Their nine-month investigation, including an analysis of existing studies into Verra’s rainforest schemes and on the ground reporting, found that the offsets largely did not lead to effective reductions in deforestation or any climate benefit.
"Only a handful of Verra’s rainforest projects showed evidence of deforestation reductions, according to two studies, with further analysis indicating that 94 percent of the credits had no benefit to the climate," said The Guardian.
Verra, the world’s largest carbon credit provider that has issued over one billion carbon credits since 2009, wrote on its website that the studies cited had reached "incorrect conclusions." It said their methodology did not account for "project-specific factors that cause deforestation."
To generate a "carbon credit," a project must be implemented to protect a part of a rainforest and ensure it is not felled. Thus, the area saved corresponds to an amount of carbon those trees are able to absorb from the atmosphere. A company can buy credits to offset its emissions. Companies like Verra are supposed to ensure that the projects they invest in are real and effective, however questions have long hung over the methodology used to determine this. Verra said it has "recently" reviewed its calculation methods and is in the process of standardising its methodology.
The voluntary carbon offsets market has recorded impressive growth over the last years to near UDS 2 billion in 2021,quadruplating from 2020, according to the latest State of the Voluntary Carbon Markets report from Ecosystem Marketplace.