Many carbon credits aren’t actually helping reduce emissions, warn University of Cambridge researchers

Most carbon offset schemes significantly overestimate the levels of deforestation they are preventing, according to a study published in Science.

It means many of the “carbon credits” bought by companies to balance out their emissions are not actually tied to real-world forest preservation. as claimed.

A team of scientists and economists led by the University of Cambridge and VU Amsterdam found millions of carbon credits relied on crude calculations that inflate the conservation successes of voluntary REDD+ projects, meaning many tonnes of greenhouse gas emissions considered “offset” by trees that would not otherwise exist have, in fact, only added to our planetary carbon debt.

REDD+ schemes generate carbon credits by investing in the protection of sections of the vital forests from the Congo to the Amazon basin.

More than 150 million credits originated from voluntary REDD+ projects in 2021, with a value of US $1.3 billion.

The researchers warn some companies use carbon offsetting to claim progress towards “net zero” while doing little to reduce their own greenhouse gases.

“Carbon credits provide major polluters with some semblance of climate credentials. Yet we can see that claims of saving vast swathes of forest from the chainsaw to balance emissions are overblown,” said study senior author Prof Andreas Kontoleon, from Cambridge’s Department of Land Economy.

“These carbon credits are essentially predicting whether someone will chop down a tree, and selling that prediction."

Overestimations of forest preservation allow the number of carbon credits on the market to keep rising, keeping prices down

“Potential buyers benefit from consistently low prices created by the flood of credits. It means that companies can tick their net zero box at the lowest possible cost,” said Kontoleon.

The researchers studied 18 REDD+ projects and looked at real-world comparison sites to analyse them, rather than relying on out-of-date historical trends.

They found only one underestimated deforestation rates, and one predicted deforestation levels similar to its comparison site. The other 16 projects all claimed far more deforestation would have taken place than their comparison sites suggested.

Of the 89 million carbon credits expected to be generated by these 18 REDD+ sites in 2020, 68 per cent of them – over 60 million credits – would have come from projects that barely reduced deforestation, if at all, the study found.

And the remaining 32 oper cent of carbon credits originated from REDD+ projects that had not conserved forest to the levels claimed by the project developers.

The findings suggest only six per cent of the total carbon credits produced by all 18 REDD+ projects in 2020 were valid.

The researchers noted four reasons the carbon credits were inaccurate. They said the use of historical trends to calculate carbon credits is highly inaccurate, and stressed that projects may be located where conservation is most likely to succeed regardless.

They noted that certification rules currently require fixed periods for projections, so adapting to changes in deforestation rates is difficult.

And they found clear risks that methods of predicting deforestation may be “opportunistically inflated” to maximise revenues from credit sales.

“There are perverse incentives to generate huge numbers of carbon credits, and at the moment the market is essentially unregulated. Watchdog agencies are being created, but many of those involved are also linked to carbon credit certification agencies – so they will be marking their own homework,” said Prod Kontoleon.

“The industry needs to work on closing loopholes that might allow bad faith actors to exploit offset markets. It must develop far more sophisticated and transparent methods of quantifying the amount of preserved forest to become a trusted marketplace.”