Non-profits condemn carbon credits usage in climate strategies

More than 80 non-profits have issued a joint statement opposing the use of carbon credits, arguing that permitting companies and countries to meet climate commitments through carbon credits is likely to hinder global emission reduction efforts.

Non-profits condemn carbon credits usage in climate strategies

Initiatives are underway to enhance the transparency and quality of available carbon credits for purchase.

The letter has been published in response to an announcement made by the Science Based Targets Initiative (SBTi) in April this year, confirming that it would provide updated guidance on how companies can use ‘environmental attribute certificates,’ including carbon credits, to account for their climate goals, particularly those related to Scope 3 (indirect) emissions.

Currently, companies aiming to align with the SBTi’s Net-Zero Standard can use offsets for only 10% of their total emissions across all scopes. Many firms have expressed concerns about achieving such substantial emissions reductions.

The consultation is expected to consider whether to increase the carbon credit allowance beyond the 10% limit. While many NGOs oppose this, six NGOs have expressed support for the decision in a letter to the SBTi last month.

Today (2 July), more than 80 non-profits have issued a joint statement, calling for voluntary and regulatory frameworks on climate transition planning to exclude offsetting.

Signatories include Amnesty International, Christian Aid, ClientEarth, Friends of the Earth Europe, Global Witness, Greenpeace, Oxfam and ShareAction, among others.

The letter contends that 78 companies, whether private or state-owned, are responsible for more than 70% of global historical GHG emissions. Therefore, these companies have a duty to significantly and promptly reduce their own emissions by implementing concrete measures within their global value chains, instead of relying on carbon credits to sidestep addressing their own emissions issues.

It states that “the difficulty to achieve these massive emission reductions cannot justify widely opening the door to creative accounting and climate distractions.”

Key concerns about carbon offsetting

The letter outlines four key concerns about promoting carbon offsetting. Firstly, it argues that offsetting may delay climate action by merely shifting emission reductions rather than eliminating them, allowing high-emitting activities to persist.

Secondly, carbon offsetting is seen as lacking credibility due to issues such as non-additional reductions, unrealistic baselines, leakage effects, and non-permanent carbon removal.

Thirdly, there are not enough high-quality credits available to meet the demand, making it impractical for significant emission reductions.

Lastly, the letter contends that offsetting creates a misleading perception of cheap abatement options, undermines carbon prices, and discourages necessary investments in reducing emissions within corporate value chains.

Efforts to enhance carbon markets integrity

Despite the longstanding controversy surrounding voluntary carbon markets (VCMs), initiatives are underway to enhance the transparency and quality of available carbon credits for purchase.

The Voluntary Carbon Markets Integrity Initiative (VCMI) is developing a rulebook to guide corporations entering the VCM, emphasising that carbon credits must represent genuine, verified reductions or removals of emissions and comply with rigorous environmental and social standards.

The guidance underscores the importance of using these credits alongside, rather than in place of, proactive decarbonisation efforts.

The VCMI also unveiled the first batch of corporates that would work with the initiative on a new “rulebook” to outline the usage of credits.

Bain & Company, BCG, Better Drinks, Natura and Sendle are among the first members of the Early Adopters Program (EAP). The programme, which runs through December, will help corporates make claims for the use of carbon credits to accelerate the uptake of the VCMI’s Claims Code of Practice.

Related feature: Will the Voluntary Carbon Market ever be a reliable tool for corporate climate plans? – edie

Comments (2)

  1. David Swan says:

    I do not understand their concern at all.

    The carbon credit mechanisms that we are using in Alberta and British Columbia, Canada seem to be working just fine.

    I’d welcome any pertinent comments. Best!

  2. Douglas Blackwell says:

    What do you not understand? as 80 good not for profit organisations GET IT

    Let me Explain Offsetting is green washing does very little to mitigate the terrors to come.

Action inspires action. Stay ahead of the curve with sustainability and energy newsletters from edie