System not fit for carbon offsetting, puts Indigenous communities at risk and should be replaced with new approach, say researchers

Rainforest conservation projects are not suitable for carbon offsetting and a different approach should be used to effectively protect critical ecosystems such as the Amazon and Congo basin, a report has concluded.

New research by UC Berkeley Carbon Trading Project looking into rainforest carbon credits certified by Verra, which operates the world’s leading carbon standard, found that the system is not fit for purpose.

It generates highly inflated environmental impacts and some projects fail to provide safeguards for vulnerable forest communities, according to the report, making them unsuitable for companies to use for carbon offsetting claims as they are not equivalent to fossil fuel emissions.

Halting the destruction of the world’s rainforests is an urgent task for meeting UN climate and biodiversity targets, and supporters of carbon markets say they could direct billions to climate change and biodiversity mitigation if they work as intended.

Through offsetting, companies and people say their own emissions have been cancelled out by paying for greenhouse gas removal or reductions elsewhere, often in developing countries.

But a new assessment by a team of 14 UC Berkeley researchers, funded by the NGO Carbon Market Watch, found that the current system of generating rainforest protection carbon credits was not fit for purpose and was open to exploitation.

The researchers assessed five quality factors of Verra’s rainforest carbon credit system, known as Redd+ projects: their durability, forest carbon accounting, community safeguards, deforestation leakage and baselines, finding widespread shortcomings in all areas.

They found that the majority of credits did not represent a positive impact on the climate, that projects had routinely underplayed the risk of displacing deforestation elsewhere, and that auditors often failed to enforce Verra’s own rules on generating credits. The report said some Redd+ projects had led to the displacement or dispossession of vulnerable communities, despite safeguards that were meant to prevent harm.

“Our research shows that the project type with the most credits on the voluntary carbon market, avoided deforestation, generates highly inflated credits that put forest communities at risk. An entirely different approach is needed to reduce deforestation and cut emissions,” said Barbara Haya, the director of the Berkeley Carbon Trading project who led the report.

The report recommended that governments and businesses should focus on curbing the drivers of deforestation around the world, support plans designed to help Indigenous communities conserve forests, and said companies should support a contributions approach to supporting rainforest conservation instead of buying offsets.

In response, Verra said it welcomed the scrutiny of the scientific and environmental community on its work, saying that many of the issues highlighted in the report would be dealt with in the new methodology for generating carbon credits, which it will be publishing in the next few weeks. It has published a technical response to the study.

“We are committed to transparency, and have built an ecosystem of processes and relationships to develop consensus standards and methodologies that support climate action,” Verra said in a statement. “It is important to note that the vast majority of findings and recommendations from this research align with extensive and systematic work to update the Verified Carbon Standard (VCS) Program that has been carried out by Verra over the last two years,” it added.

Earlier this year, the Guardian published an investigation that found that a vast numbers of rainforest carbon offsets were worthless. Several large companies have moved away from claims based on offsetting in recent months.

“The research shows that the current rules governing Redd+ projects seriously lack credibility and cannot be trusted to generate high quality carbon credits. Businesses are offsetting their emissions on the cheap by buying low-quality carbon credits connected to forest protection projects in the Global South,” said Inigo Wyburd, a policy expert on global carbon markets at Carbon Market Watch.

Carbon Market Watch said it would be writing to Verra highlighting projects they thought were issuing illegitimate credits.

“Biodiversity, the climate and Indigenous people or local communities are losing out on what should have been a system to drive meaningful financial flows to the forest conservation projects that so desperately need it,” said Gilles Dufrasne, policy lead on global carbon markets for CMW.

“Offsetting should be axed. It cannot work in its current form, and carbon markets must evolve into something different. The focus should be on getting money to the right place, rather than getting as many credits as possible,” he said.