Top U.S. seller of carbon offsets probes its own projects
Following concerns that it is facilitating the sale of meaningless carbon credits to corporate clients, the Nature Conservancy says it’s conducting an internal review of its portfolio of carbon-offset projects. The nonprofit owns or has helped develop more than 20 such projects on forested lands, mostly in the U.S., which generate credits that are purchased by such companies as JPMorgan Chase, BlackRock and Walt Disney, which use them to claim large reductions in their own publicly reported emissions.
The self-examination follows a Bloomberg Green investigation last year that found the world’s largest environmental group taking credit for preserving trees in no danger of destruction. The internal review is a sign it’s at least questioning some practices that have become widespread in the environmental world, and could carry implications for the broader market for carbon credits.
While the Nature Conservancy declined to answer specific questions about the review, it said in a statement that it aims to meet the highest standards with its carbon projects and that the inquiry will be led by scientists and a “team of experts with deep project knowledge.”
Selling credits for well-protected trees potentially undermines the sustainability efforts of some of the world’s biggest companies. Each carbon offset is supposed to represent the reduction of one ton of planet-warming emissions that would have otherwise spewed into the atmosphere without intervention. Around the world, a wide variety of offset projects do everything from protect mangrove forests to destroy heat-trapping gases from landfills and coal mines. But offset payments channeled to already safe ecosystems don’t fundamentally change the amount of carbon dioxide in the atmosphere.
“The way the Nature Conservancy has gone about this is unconscionable,” says Charles Canham, a forest ecologist at the Cary Institute of Ecosystem Studies and a longtime board member of a local chapter of the Conservancy. Canham reached out to staff members at the conservancy days before Bloomberg’s article was published in December to urge a different approach to carbon offsets. One of his key concerns is how the nonprofit calculates the number of credits it sells.
Every offset project is measured against a so-called “baseline scenario,” an estimate of what would have happened in the absence of carbon revenue. For forest offsets, the difference between the existing trees and the theoretical trees in the baseline scenario determines the amount of carbon credits that get to be sold.
But lax rules have allowed project developers to make unlikely claims that huge numbers of well-protected trees were going to be cut. In the case of the Conservancy, many of its projects claim the forests would have been harvested aggressively — much as a commercial timber company would do — in the absence of carbon payments. While this allows the nonprofit to sell more carbon credits, Canham says it doesn’t realistically reflect how a conservation group would manage its land.
“In a sense, you’re giving a polluter a license to emit a very large quantity of pollution based on these things,” says Canham, who says he will step down after 24 years on the board of the conservancy’s Adirondack chapter unless the nonprofit “radically changes” its approach to carbon projects.
In its written statement, the nonprofit defended its existing projects, which it said have been verified by third-party reviewers and comply with requirements established by nonprofit registries that supervise offsets. “As our understanding of climate change science and policy evolves, changes, and grows, we strive to ensure our projects do the same so we can achieve our goals for a low-carbon future,” the group said.
Carbon offsets have become an increasingly common way for businesses to claim large reductions in their emissions. In 2020, companies purchased more than 93 million carbon credits, equivalent to the pollution from 20 million cars in a year. That’s a 33 percent increase over 2019, according to clean-energy research firm BloombergNEF. The market is poised to grow sharply in the coming years as heavy emitters such as Royal Dutch Shell, Delta Air Lines, and JetBlue have vowed to negate pollution by acquiring more carbon offsets. Mark Carney, the former Bank of England governor who is an organizer of this year’s COP26 climate talks in Glasgow, Scotland, has said that the global market for carbon offsets can be expected to grow to $100 billion in the decades ahead.
Even though this money sometimes flows to organizations that do good works — including the Conservancy, which has protected more than 125 million acres since its founding 70 years ago — experts say carbon projects that take credit for activity that was already occurring are meaningless and undermine the credibility of the entire market.
“Carbon offsets are not a donation to a nonprofit group, it’s a purchase of a product,” says Eli Mitchell-Larson, a University of Oxford climate researcher and co-author of the Oxford O≠setting Principles, which provides guidance for how offsets should be used by companies with zero-emission targets. “The purchaser is getting the ability to say they’ve neutralized one ton of their emissions.”