Revealed, the carbon offsetting ‘Wild West’
CONSUMERS trying to offset their emissions risk being deceived in a “Wild West” unregulated carbon market, a Daily Telegraph investigation has found.
As the trading of carbon credits becomes increasingly popular, concern has been raised about offsetting projects around the world.
Environmentalists have warned that the schemes could be doing more harm than good, as people wrongly think they are cancelling out their environmental impact and therefore do not curb polluting behaviour.
The Telegraph became one of the first media organisations in the world to gain access to an illegal sapphire mine in Madagascar, situated in a conservation zone that is used to generate carbon credits and has seen increasing rates of deforestation.
Separate satellite analysis for this newspaper has also revealed that trees are being cut down at a project in Brazil which is used by both British Gas and the International Air Transport Association (Iata).
To offset emissions produced by energy use, or activities such as flying and driving, individuals and companies can purchase credits generated by a project that removes carbon from the atmosphere, for example by planting trees or preventing deforestation.
However, campaigners say that the premise is fundamentally flawed and carbon trading cannot be justified in situations, such as those exposed today in this newspaper, where there has actually been an increase in deforestation in areas used for carbon offsetting.
These revelations are the latest in a long line of problems with carbon offsetting projects which have seen saplings die because of droughts and forests ripped up by the Cambodian army or Brazilian gold miners.
The news comes as the Government has signalled its increasing commitment to reducing emissions and pollution. Yesterday, it was announced that the sale of domestic coal and certain types of wood will be banned, weeks after plans were revealed to stop the sale of new petrol, diesel and hybrid cars by 2035.
The offsetting industry is experiencing a boom. The “Greta Thunberg effect”, named after the Swedish climate-change activist, has seen consumers increasingly keen to limit the environmental impact of their actions. Companies such as easyjet, British Airways and BP pledging to go carbon neutral and offering offsetting options has also fuelled the industry.
Heathrow announced yesterday that it was carbon neutral and would be offsetting carbon emissions through tree planting in Indonesia and Mexico.
The global carbon trading market is estimated to be worth hundreds of billions of dollars, while the voluntary market, on which individuals can purchase carbon credits, was worth $296 million (£229 million) in 2018, more than double the previous year, according to Ecosystem Marketplace. The December report says the market
is “at the tipping point we’ve long been waiting for”, as companies respond to consumer pressure to offer green options. But the organisation noted that growing demand could lead to “subpar” offsets as “inexperienced buyers” get involved in the market.
Lou Munden, founder of TMP Systems, a consultancy specialising in climate change that has analysed carbon markets since 2011, said: “We don’t have any good evidence one way or another to tell you whether this stuff works, we just don’t know.”
Environmental groups have called for more regulation of the market, which sets its own standards and prices, which differ depending on which project the credit is generated from.
Peter Rigg, who convenes the Climate Land Ambition and Rights Alliance, which includes Oxfam and Action Aid, said that a single credit can have a different price depending on its “back story”, showing that carbon is not a fixed tradeable commodity.
Dr Doug Parr, Greenpeace UK’S chief scientist, said: “It’s bad enough that big carbon emitters like airlines are using offsetting as a license to pollute, but they often encourage their customers to join in the greenwash, too.
“Passengers are given the impression that by coughing up a few quid they can magic away the planet-heating gases from their flights.
“But what customers aren’t told is that this market is an unregulated Wild West, and there’s little evidence that offsetting schemes generally work. The best and safest way to reduce carbon emissions remains not to produce them in the first place.”
Studies have shown that about three quarters of the projects do not provide any environmental gain because they would have happened anyway.
Industry sources have told The Daily Telegraph that there is recognition that forest projects are not really working, but senior conservationists are reluctant to point out the flaws in the system for fear that people will stop buying credits as the current system is “better than nothing”.
Gilles Dufrasne, a policy officer at Carbon Market Watch, said that under the current system, consumers do not know what they are buying.
“There is such a lack of transparency and communication from many of the big companies that purchase carbon credits, you don’t really know what is being purchased or what the impact of your money is,” he told The Telegraph.
“I would never tick a box saying ‘I would pay to offset’, without knowing what the project was,” he added.
Grant Shapps, the Transport Secretary, has spoken in favour of carbon offsetting, and the Government last year launched a consultation on whether to make it compulsory across transport sectors for consumers to be offered the opportunity to offset.
The results of the consultation are expected this year, but are understood to have been delayed as the Government tries to keep up with the scale of voluntary offsetting among airlines.