By Luey Garcia, F24 Environmental Clinic student
Carbon credits, sometimes referred to as “nature-based solutions,” follow a straightforward concept: companies that emit pollutants pay to develop projects that mitigate those emissions, usually measured in tons of carbon dioxide. This aims to advance the “Just Transition” by helping companies either meet regulatory requirements, or meet their Net Zero goals. The idea originated in practice through the Clean Development Mechanism (CDM) within the Kyoto Protocol. Under the CDM, developing-country projects that reduce emissions and contribute to sustainable development earn credits that can be sold to countries or companies on the voluntary carbon market.[1]
Projects that generate carbon credits take many forms – some are designed to protect land from degradation, some to improve conditions at deteriorated sites, and some to mitigate the impact of harmful practices. Avoided Deforestation is the type where most issues with effectiveness occur. The project type functions just as it sounds – in exchange for funding to cover the costs of changed practices, landowners agree to prevent expected harvesting. This format sometimes overestimates the value of projects for pecuniary gain, overstating the contributions of corporations towards net zero goals.
A report by Bloomberg[2] evaluated an Avoided Deforestation scheme implemented by the Nature Conservancy in Hawk Mountain, a bird-watching sanctuary owned by a non-profit dedicated to its preservation for over 85 years. This non-profit, with 60,000 visitors each year, had grown into a $3 million organization from ecotourism and membership fees. There was room for carbon crediting based on potential minor enhancements to forest health. Instead, the Hawk Mountain Sanctuary Association, despite demonstrating consistent practices of conservation for almost a century, was allowed by the Nature Conservancy to claim credits on the assumption of intensive logging “wiping out about 89% of the living trees in only five years.” Around 100,000 credits were claimed immediately by JPMorgan. This is not a unique scenario, either – the Massachusetts Audubon Society also made millions of dollars by claiming the impending destruction of their long-protected forests, generating 600,000 credits for oil and gas companies with little to no actual carbon sequestration behind them.[3] As a matter of fact, Carbonplan research found that 90% of the landowners they studied were claiming within 5% of the maximum levels of deforestation allowed by the Air Resources Board (in Mass Audubon’s case, it was 0.2%).[4] In the words of Prof. Andrew Macintosh, an environmental law and policy professor at The Australian National University, “people are getting credits for not clearing forests that were never going to be cleared, they are getting credits for growing trees that are already there, they are getting credits for growing forests in places that will never sustain permanent forests,” and accountability is lacking.[5] Wasted time and resources could deal a significant blow to the goals of climate solutions everywhere.
Put simply, the market is difficult to navigate if you’re looking for high-quality carbon credits. Extra assurance is necessary to ensure the ecological benefits of a credit are legitimate. Organizations can take a few lessons from these incidents. First, whenever credits are not based on outright direct observation or measurement of sequestered carbon, it is important to use baseline estimates that take historical land practices into account as well as common-sense knowledge of reasonable landowner expectations. It follows that credit issuance should be based on empirical evidence when possible, compensating entities only for the confirmed removal of pollutants. We should treat the financial benefits as a secondary bonus to the environmental responsibilities. Alternatively, doing away with measurement in the first place could mitigate the incentive to greenwash – if the focus is on providing holistic support to ecosystems rather than pursuing a numeric emissions goal, corner-cutting can be avoided.
[1] https://cdm.unfccc.int/about/index.html
[2] https://www.bloomberg.com/features/2020-nature-conservancy-carbon-offsets-trees/
[3]https://www.technologyreview.com/2021/05/10/1024751/carbon-credits-massachusetts-audubon-california-logging-co2-emissions-increase/
[4] https://carbonplan.org/research/forest-offsets-explainer
[5]https://www.theguardian.com/environment/2022/mar/23/australias-carbon-credit-scheme-largely-a-sham-says-whistleblower-who-tried-to-rein-it-in
