By any standard, the beginning of this year has been tough on carbon offsetters.
First came the damning article in the Guardian[1], revealing the results of a months-long investigation into Verra, the administrator of the Verified Carbon Standard (VCS), the world’s largest carbon crediting programme. The claims that more than 90% of Verra’s rainforest carbon offsets are worthless might yet be disputed, but the damage is already done. The seeds of doubt planted in the hearts of investors are sprouting as predictably and irreversibly as those budding snowdrops and daffodils popping up in early spring.
Piling onto their troubles, soon thereafter, the independent investigative journalists of Follow the Money published another detailed account of carbon offset mischief. Digging into the inner workings of Swiss-based South Pole, they claim to find plenty of proof that the world’s leading climate consultant has been selling phantom emission rights to hundreds of companies, including Gucci and Volkswagen, for years. Their riveting story of how a meaningful project got transformed into an ugly money-making machine should come with a health hazard warning. Reading it has certainly had me depressed for most of the week.
And yes, some of the findings might be inflated or overinterpreted by my zealous media brethren. The industry is, naturally, making a (rather feeble) effort to defend itself. Admittedly, the main argument, that we shouldn’t throw the baby out with the bathwater, still holds.
Nevertheless, actions are bound to have consequences.
By the end of the week, I hear that big money is turning its back to carbon offsets. The Net-Zero Asset Owner Alliance (NZAOA), boasting some USD 11 trillion of combined assets, just published an updated target-setting protocol, revealing that members would no longer be allowed to rely on the convenient practice of using carbon credits to offset their greenhouse gas emissions. The ban is not as drastic as it sounds; the NZAOA still wants to support the development of a high-quality liquid and fully accountable market for carbon removal certificates. “However, we expect members to prioritise real-world abatement (decarbonisation) at least until 2030,” comments Jessica Andrews, UNEP FI investment lead and senior project manager for NZAOA.
Meanwhile, here in Sweden, the Patent and Market Court has just ruled to prohibit dairy giant Arla from using the phrase “net-zero carbon footprint” and similar claims, based on the use of carbon offsets, when marketing their dairy products. “The court finds that consumers do not understand that the company’s promise of net zero is based on climate compensation activities that would only be able to offset the carbon footprint of milk production in 100 years,” according to the ruling (in Swedish). The fine of SEK 1 million might seem rather symbolic, but the company has already ceased net-zero advertising.
I know, I know, there is a difference between causation and coincidence. I shouldn’t read too much into the timing of NZAOA’s announcement or a Swedish court’s ruling and the massive wave of carbon-offset criticism immediately preceding them. Still, can you blame me for connecting these particular dots?
[1] N collaboration with Germany’s Die Zeit and investigative journalist organisation SourceMaterial.
