“The science clearly shows that offsets fail to deliver additional emissions reductions and are an unreliable tool for fighting the climate crisis’, claim a group of more than 80 global finance industry advocates, bodies and nonprofits.
Carbon emitting companies purchase carbon offsets to reduce the overall climate impact of their activities, with the offsets funding projects such as reforestation, building renewable energy, carbon-storing practices or carbon-removal devices.
Yet a series of studies showing carbon offsets have limited impact and may be vulnerable to fraud, along with high-profile scandals in recent years, have seen them fall out of favour.
Greenpeace, Amnesty International and Oxfam are among the group that have united to speak out against the use of carbon offsets. Other signatories include Banktrack, Reclaim Finance, ShareAction, Finance Watch, Urgewald, Facing Finance, the Association of Ethical Shareholders Germany and the NewClimate Institute.
The group signed a letter in response to increasing pressure to allow countries and companies to use carbon credits, claiming offsets provide a social licence for high-emitting activities to continue and only delay action.
Climate transition planning must exclude offsetting
“Climate targets must focus primarily on reduction of greenhouse gas emissions within companies’ and countries’ own boundaries, including the phasing out of fossil fuel production, transport, sale and use,” the letter said.
The letter said, at best, offsetting “doesn’t reduce the concentration of GHGs in the atmosphere, it simply moves emission reductions from one place to another.”
The group also argued that allowing offsets to grow means that high-emitting activities are able to carry on, saying fossil fuel companies have claimed to be reducing emissions by investing in planting trees while increasing their production of coal, oil and gas.”
“Allowing companies and countries to meet climate commitments with carbon credits is likely to slow down global emission reductions while failing to provide anything like the scale of funds needed in the Global South, and reducing pressure to develop large-scale mechanisms such as ‘polluter pays’ fees on emission-intensive sectors.”
Instead, the group urged companies to stick to scientifically backed methods to lower carbon emissions and called for the Science Based Targets Initiative (SBTi) and the Greenhouse Gas Protocol to continue to exclude carbon offsets from their methodologies on how companies can lower emissions.
This comes after SBTi — a nonprofit that helps companies set targets for lowering emissions — said earlier this year that in opposition to its longstanding policy of excluding offsets it was considering allowing companies to use carbon offsets to reduce their environmental impacts.
The letter said, "Carbon credits send a misleading signal about the efforts required to pursue climate action, and they undermine carbon prices by providing a false sense of the existence of ultra-cheap abatement options around the world.
"They also risk disincentivising the significant investments needed to ensure profound changes to corporate value chains and economic systems.”