Staff at an influential corporate climate action group have found that carbon offsets, meant to compensate for supply chain emissions, are largely ineffective, according to a preliminary draft.
This finding challenges the burgeoning voluntary carbon offset market, valued at around $2 billion. Major corporations such as Microsoft, Salesforce, and Amazon are significant players in this market, yet its overall size remains small.
The Science-based Targets initiative (SBTi), a UN-backed nonprofit that audits corporate emission reduction plans, sparked internal dissent last month by announcing a plan to allow the use of carbon credits before completing its research on their efficacy.
Following this announcement, the SBTi’s board clarified that no policy changes had been made and that decisions would be guided by evidence.
The staff document, which has not been previously reported, reviews scientific papers and consultation submissions. These findings are subject to further analysis by the Scientific Advisory Group, composed of global climate scientists. If validated, the findings could impede the SBTi’s board from incorporating carbon offsets into corporate emission reduction strategies.
Several of SBTi’s financial backers, including the Bezos Earth Fund and former U.S. climate envoy John Kerry, advocate for carbon offsets. They argue that offsets are crucial for stimulating investment in clean energy and achieving the global goal of net-zero emissions by 2050.
An SBTi spokesperson stated that their research on carbon offsets is ongoing and that it is premature to discuss any interim findings.
The draft report highlights instances where carbon credits have not delivered the promised climate benefits. For example, one reviewed scientific paper found no significant evidence that projects in the Brazilian Amazon effectively mitigated forest loss.
Additionally, the draft notes cases where some schemes sell more credits than the projects can deliver or exaggerate the emission reductions achieved.
Proponents believe that selling credits from carbon offset projects can channel funds to climate-friendly initiatives. However, critics argue that the quality of these offsets is often questionable and fear that they might allow companies to shirk their direct emission reduction responsibilities.
The Integrity Council for Voluntary Carbon Markets, tasked with ensuring the quality of carbon offsets, is working to expand its list of approved projects. Meanwhile, the U.S. government is preparing to release guidelines for carbon offset use to build market confidence and ensure that credits represent genuine emission reductions. The European Union is also exploring ways to integrate voluntary carbon credits into its existing carbon allowance scheme.
At the United Nations’ COP28 climate talks in December, negotiators failed to finalise new rules for launching a central system for countries and companies to offset and trade carbon emissions.
As the debate continues, the preliminary findings from the SBTi staff highlight the challenges and complexities of using carbon offsets as a tool for achieving climate goals. The effectiveness and integrity of these offsets remain contentious, underscoring the need for rigorous evaluation and transparent standards in the fight against climate change.
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