The lucrative scam of carbon credits

December 28, 2022

In the heart of the Amazon rainforest, Indigenous leaders are engaged in a crucial battle—not only for the preservation of their ancestral lands but also for the stability of the global climate.

However in reality, the credit market is a lucrative scam that has done little to address the root causes of the climate crisis.

First, it’s important to understand how they work. Essentially, countries and companies can buy credits to offset their emissions. The credits themselves are generated through projects that reduce or remove greenhouse gases, such as renewable energy or reforestation projects. The idea is to incentivise the transition to clean energy and help organisations and even whole countries to meet their emissions reduction targets.

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However in reality, the use of credits is rife with fraud and abuse. Companies and governments have been able to use them as a way to continue business as usual, rather than making the necessary changes to reduce their own emissions, with credits used in many cases to finance projects that would have happened anyway.

The market itself has been dominated by a few large corporations, who have been able to manipulate the system for their own gain. These companies have been able to use their influence to secure credits for projects that may not have a significant impact on reducing emissions. Further, organisations have been criticised for their lack of transparency and accountability as it is difficult to track the effectiveness of funded projects, resulting in numerous instances of mismanagement.

It’s not just corporations that have benefitted however. Countries too have continued to emit greenhouse gases while giving the appearance of taking action on the climate crisis.

At a time where limiting warming to 1.5 degrees might be all but a missed opportunity, it seems critical we tackle the source of our emissions and make the necessary changes to transition to a low-carbon economy rather than continuing as usual and offsetting.

Credits may be argued to be a good interim measure, and I can see that point. However, they are really a short term solution. Without drastic action, we’re not going to reverse the man-made effects causing warming — and if anything, they’re just going to keep going up.