Why look at this?

Carbon credit and carbon offset schemes from the outside come across as reliable methods to reduce emissions by incentivizing corporations to improve their emissions to reduce prices paid by investing carbon offset projects. However the reality is vastly different, with several regulatory issues that result in almost the opposite events taking place:

In-Market Regulations

 Secondly, the carbon offset market is an inherently biased system that depends on it’s own growth. As previously mentioned, groups like Verra and Climate Impact Partners act as de-facto regulators for carbon offset projects, but also sell access to these projects to major polluters to help their offsets [2]. This incorporates an inherent bias where the systems regulators are participating in the market it’s regulating, and can result in fraudulent activity as previously mentioned due to these groups being incentivised to promote high-integrity options and review positively to increase their own stock margins.

This is further worsened by the number of carbon credits being issued each year exceeding the number retired, causing the industry to continuously grow. The combination of these factors is a market to reduce emissions being poorly regulated, investing in projects that fail to accomplish their goals as the industry has fraudulently regulated them, and then increasing their own values which creates a system where emissions actually increase in a demand to increase market size [1] and stock value without minimal government regulation.

What we can do

These are just a few examples of issues with the current carbon credit market, but the real effects have a horrid toll on the world where they do the opposite of what they intend, leading to increased emissions and a market bubble dependant on an ever increasing emissions to offset. The question of what we can do to change this is a complex one, but a crucial starting point would be to take the duty of regulation out of the hands of corporations which participate in the market, and instead have an impartial body that can perform a proper assessment of projects to determine value.

In addition, also further refining the valuation process, reducing areas of ambiguity that have been exploited over recent years and force corporations to pay a fair share in repairing the damage they are helping to cause. These are just a beginning point, but in order to make any realistic progress we must try to hold those responsible to account and not allow them to effectively govern themselves on matters this crucial.