Only a few carbon projects meet basic criteria for climate integrity, human rights and more

Thursday, April 8, 2021

A review of more than a hundred carbon capture projects certified with industry leading standards shows the voluntary carbon market is riddled with severe integrity issues. The review comes after a year's work done by Compensate, a climate nonprofit and impact startup, which manages a carbon capture portfolio.

– Before embarking on this review, I knew the offsetting field was full of projects with questionable climate impact. Our work demonstrates just how bad the situation truly is, says Niklas Kaskeala, Head of Sustainability at Compensate.

Compensate started using its proprietary project criteria in the beginning of 2020. The organization has since screened over 100 nature-based projects with certifications deemed industry staples. Less than 10 % of these projects have passed the criteria and have been added to Compensate’s carbon capture portfolio.

The voluntary carbon market is at a crossroads. It’s expected to grow exponentially and help humanity fight global warming, but potential harm looms if the growth happens only on paper, says Compensate's CEO Elina Kajosaari:

– For offsetting and the voluntary carbon market to truly make a difference, it must be done well. Only then can it become the tool against climate change that it can be.

Questionable climate integrity and human rights issues

Problems in projects vary. Some projects can not be considered additional, others have serious permanence risks. Some have unreliable baselines, because assumed deforestation is largely inflated. Worryingly, many projects also cause serious human rights violations. 

– We believe that it’s our responsibility as the carbon capture partner to ensure that all means of carbon capture are done as sustainably as possible. By creating our own criteria, we’re now challenging the whole field and its current standards. We must all do better, says Kajosaari.

Similar demand for stricter standards has arisen in the industry, of which the Taskforce on Scaling Voluntary Carbon Markets, led by Mark Carney, serves as a prime example. Criticism towards nature-based projects has increased, and there’s even been discussion on whether low-quality carbon credits actually inadvertently increase the amount of carbon in the atmosphere. 

– For too long the market has been selling cars without engines, credits without impact. This is largely because evaluating and selecting offsetting projects requires specific expertise and critical thinking, and because demand has grown so quickly, Kaskeala says, and continues:

– There’s no perfection here, but at Compensate we’re constantly learning and getting better at evaluating what constitutes a good project. We’re not asking for anything unreasonable, just that offsetting is sustainable, effective, and creates true climate impact.

Solutions already exist

Solving the issues does not require new technology or major investments, the solutions are at hand if motivation can be found, Kaskeala believes:

– The whole market must acknowledge these current flaws and understand the risks. The need and the potential of nature-based solutions should be recognized, and overall quality and transparency must be supported going forward.

For offsetting buyers, the basic thought to follow is simple: Emission reductions are the primary way to solve the climate crisis. Compensating unavoidable emissions should be done by choosing high quality projects with demonstrated true climate impact.

Policy makers should encourage industries to reduce their emissions, and adopt policies that prevent low quality credits from being sold on the market. In addition, the voluntary market’s compliance with international climate agreements and the related double counting issue are solvable by applying corresponding adjustments to national carbon registries, resulting in removing carbon from the atmosphere beyond compliance targets.

Alternatively so-called contribution claims that support national compliance targets should be explored. Under this model, companies would finance climate change mitigation projects but not make an offset claim, instead helping countries meet their Paris Agreement goals.

For offsetting partners and project developers, selecting a conservative and science-based approach when choosing the methodology for calculating carbon credits ensures climate impact and higher integrity. Selling ten times fewer, high quality credits at a premium price is better than saturating the market with low quality credits with overestimated climate impact.

You can download Compensate's white paper Reforming the Voluntary Carbon Market here – in it, you'll discover a breakdown of the research done by Compensate, and ways in which the voluntary carbon market should be developed.

Download our white paper here

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