Rachel Rose Jackson & Adrien Tofighi-Niaki of Corporate Accountability are lead researchers on a new report on the effectiveness of carbon offset reforms.
As we pen this, the world’s governments are gathered in Bonn, Germany, for a round of tense climate negotiations that must deliver fruitful progress if COP30 later this year in Belém has any chance of helping us avoid complete climate breakdown. Simultaneously, industry actors, policymakers and thousands of participants are coming together in London for more than 700 events meant to catalyse local to global climate collaboration.
We all know what is at stake should the world fail.
For decades, carbon offsets (or “pollution allowances” purchased by polluting actors and counted towards their emissions reductions) and the voluntary carbon market (VCM, which links up offsets into a globally tradable market) have been consistently promoted by world policymakers and the private sector as our key to addressing climate change.
Yet they have never, not once, correlated with a sustained decrease in global greenhouse gas emissions. Today, dozens upon dozens of independent studies and investigations repeatedly remind us of the fundamental failures of offsets and the VCM.
Pará’s Amazon forest carbon deal in doubt as prosecutors move to block it
Yet, the VCM is predicted to reach values of up to US$27 billion by 2035, signalling the clear intent to go “all in” on a scheme that has repeatedly proven its own failure. Meanwhile, leading scientists and the UN Secretary-General have warned against dubious offsets and put the VCM on notice, insisting the industry plug its holes or sink the ship.
VCM 2.0
In response to years of public exposure of its failures, the VCM industry is trying to defend its legitimacy through a coordinated reformation strategy – the “VCM 2.0.” New industry-led initiatives, methodologies, and standards have been launched to rescue the VCM – in a rush to assure investors that the Titanic’s holes are being plugged and that the iceberg is not fatal.
Going “all in” on offsets and the VCM means betting our futures, massive resources, and the ability of the planet to sustain human life on a mechanism that has failed to prove its competence for decades.
To understand how risky this bet is, we looked at “VCM 2.0” performance in 2024 to see if there are any signs that these reforms are spurring fundamental shifts, or whether carbon offsets are still beyond fixing.
Carbon credit auditors suspended for failures in sham rice-farming offsets
Widespread use of ‘problem’ offsets
What we found was concerning, but not surprising. Despite ongoing reforms, problematic offsets – with failings that mean they may not deliver the carbon savings they represent – remain the norm.
More than 47.7 million problematic offsets were “retired” (VCM lingo for purchased and counted towards emissions reductions) by 43 of the world’s largest projects in 2024, accounting for nearly a quarter of the entire VCM. None of these offsets can be counted on to deliver the promised emissions reductions, yet they are used by actors around the world, often in lieu of truly reducing emissions. In addition, we found that:
- Eighty percent of the offsets assessed were unlikely to deliver the promised emissions reductions.
- Nearly all (or 93%) of the projects retiring problematic credits are located in the Global Soth, countries that have historically contributed the least to climate change. This includes five projects in Brazil, host of the U.N climate talks later this year.
- The approval and promotion of problematic offsets spreads much further than one or two “bad apples.” Four registries and at least 17 verifiers were involved in approving these problematic offsets, signalling much broader responsibility for the failure of the VCM to deliver emissions cuts.
- Forestry and land use projects and renewable energy projects are among the most utilised problematic projects, though other sectors were also involved.
- All 37 projects we looked at in greater detail had a legitimate risk of having at least one fundamental failing that rendered the projects unlikely to deliver – totalling nearly 40 million credits. These projects either had a legitimate or high risk of non-additionality (23), non-permanence (14), leakage (17), or over-crediting (19).
Dangerous to ignore failings
This new research, which is just the tip of the iceberg, suggests that despite ongoing reforms, the VCM 2.0 continues to largely fail. Carbon offsets are hastening the likelihood of global climate action failure, not preventing it. Any advances through this reform appear to be limited in scope and potential, posing the question of why VCM supporters and investors continue to take on the liability in the face of proven (and repeated) failure.
Indigenous land disputes cloud Kenya’s carbon market ambitions
These findings, combined with the work of many other experts, necessitates clarity on who is responsible for the repeated failures of the ‘checks and balances’ of the VCM for the last decades. It’s time we reckon with what this research and the overwhelming evidence so clearly lays bare – that the VCM is still driving us head first toward the iceberg, and that offsets rip open rather than plug leaking holes, despite claims of reforms.
It is evident that 2024 repeated the failures of the past. We cannot entrust the VCM industry to captain the ship of climate action any longer. If we do, we know that humanity’s collision with the fatal iceberg is all but guaranteed.
*Neither Corporate Accountability nor the authors have any conflict to disclose. Corporate Accountability does not take any funding from corporations or governments. It is funded primarily by individuals and carefully vetted foundations.*
