The carbon-credit market must reform or “go out of business,” according to leading scientists in an international review of the offsetting industry.
Last year, the market for carbon offsets shrank dramatically after scientific and media reports revealed many offsetting schemes had minimal environmental impact.
However, experts concluded that, if comprehensively reformed, offsetting could still generate billions of dollars for climate and biodiversity initiatives.
The Climate Crisis Advisory Group (CCAG), led by former UK chief scientific adviser Sir David King and comprising top scientists, has issued a new assessment of the voluntary carbon market, suggesting ways to rebuild trust.
The CCAG recommends that the unregulated sector adopt rigorous scientific standards for generating carbon credits, ensure financial benefits reach local communities involved in projects, and prioritise carbon-removal projects that actively extract greenhouse gases from the atmosphere.
King highlighted the deep issues with the current system for producing carbon credits, warning that unless the voluntary carbon market changes, it will go out of business and be replaced by a system with higher standards.
“The voluntary carbon market is very reluctant to take this fully on board. Our report is totally independent of them. It is going to be challenging, but our simple message is that unless you do this, you’re out of business,” he said. “Trust has been lost and it’s got to be regained.”
Recently, governments and voluntary initiatives have attempted to restore confidence in carbon markets after their value more than halved in a year, dropping from $2 billion (£1.6 billion) to $723 million in 2023.
The report, produced by prominent climate and biodiversity researchers including University College London professor Mark Maslin and Chilean biologist Mercedes Bustamante, was funded by Verra, the non-profit organisation behind the world’s leading carbon standard, though Verra had no oversight of the findings.
Maslin said: “Be under no illusions: what we are saying is that it is not good at the moment, but we need to fix it.
“It cannot be left up to the industry. There need to be rules and regulations in place; we need it to be much stricter.”
Currently, up to 90% of carbon credits are based on “avoidance” of emissions (such as funding renewable energy to reduce fossil fuel use) rather than direct removal of carbon dioxide from the atmosphere. The report strongly advocates a shift to high-quality carbon removal projects.
“Avoidance is an utter nightmare,” Maslin said. “All of us agree that getting a carbon credit for a renewable energy project in most countries doesn’t make sense because it’s already cheaper.”
Verra’s president and interim chief executive, Judith Simon, said in a statement that the organisation was “proud to support independent research that asks the tough questions” and that “key recommendations endorsed in this report are very much aligned with the many steps we are taking”.
“We entirely agree,” she added, “that carbon credits must be transparent, scientifically sound, and both well-measured and monitored with commitment to the principles of each project.”
——————————————————————————
At Natural World Fund, we are passionate about rewilding the UK to stop the decline in our wildlife.
Donate now and join in the solution!
