By Adam Cruise – EMS Foundation
Carbon mitigation or carbon offsets is a trading mechanism that enables governments, businesses, or individuals to compensate for their greenhouse gas emissions by investing in projects that reduce, avoid, or remove emissions elsewhere. When an entity invests in a carbon mitigation program, it receives carbon credits. These credits are then used to account for net climate benefits from one entity to another. A carbon credit can be bought or sold after certification by a government or, more frequently, by an independent certification body.
Ostensibly, the carbon offset trading mechanism involves an entity – usually in the developed world – that emits greenhouse gases into the atmosphere paying for another entity – usually in the developing world – to mitigate the former’s emissions. For example, if an industrial oil company in Europe that wants to compensate for its emissions, it can pay for a patch of natural or agricultural space in Africa such as a forest, farmland, wetland, or grassland (known as a carbon sink) to be preserved or better managed. This supposedly ‘cancels out’ or sequesters that company’s emissions. Africa only produces four percent of the world’s emissions of carbon dioxide and has extensive areas of natural space, which makes it a desirable choice to act as a compensation for emissions emitted in developed countries.
The concept behind carbon mitigation schemes, especially those that are designed to sequester carbon emissions from elsewhere, are meant to transform struggling conservation schemes into financial assets worth hundreds of millions of dollars. These funds are also supposed to ease the burden of human poverty of local communities that live in and around the natural spaces used to sequester carbon. Carbon credits, especially from the voluntary carbon market (VCM), have been traded by a growing number of carbon desks at investment banks and oil companies at lucrative premiums.
However, experts and researchers have recently found that the carbon market, especially the voluntary carbon market, often only benefits the international traders and emitters rather than achieving true carbon emission sequestration, biodiversity protection and local community well-being. This report has found that VCMs have largely been co-opted by verification and certification companies and traders who have spent much of the last 15 years snapping up and enrolling large tracts of land in Africa, with little care for biodiversity protection and local community rights.
Concerns about management of carbon projects are widespread and growing. These include concerns about the ecological integrity of the schemes, with the vast majority of claims found to be worthless. The schemes, which are mostly conducted privately, have also been found to have few to zero checks and balances.In some projects, people have been forced from their homes.
Other project developers have promised to establish land rights or provide community benefits, then failed to deliver.
It is also common for entities of carbon offsetting projects to claim that local communities are the main beneficiaries of their initiatives – yet these claims are usually unverifiable given the secrecy reigning over projects’ (which are often with private companies) revenues and expenses. Generally, only companies running the projects really know how much money is trickling down, and how much their executives and business partners are cashing in. The certification standards that dominate the VCM do not actually require developers to equitably share profits with communities on whose land the project may be taking place. As it stands, the lack of transparency over projects’ revenues makes it impossible to fact-check the sweeping claims about offsetting projects being a major source of livelihood for local communities.
These problems have manifested in South Africa too. As this report will show, not only is the carbon trading system unworkable at an institutional/government level, but there are widespread problems with the nature of verifying organisations such as Verra, the world’s largest carbon certification company, where carbon schemes exaggerate or falsely claim the carbon reduction benefits. These are known as junk credits. There is, further, little local community engagement, a broad lack of transparency and cases of ecological destruction.
Thus, in South Africa and throughout Africa, the carbon market is far from being the win-win solution, where entities that emit carbon as well as developers and verification organisations who claim to promote carbon reduction and biodiversity protection projects, are leaving a track record of exploitation, mismanagement and false claims. These cases show that carbon reduction and biodiversity protection schemes are simply a corporate money-making machine that benefits the developed world over a real intervention sequestering global carbon emissions.
Furthermore, in the last couple of years, the market has collapsed, mainly due to media and academic reports of ‘greenwashing’ and human rights abuses. This means the future viability of carbon markets and resultant ecological and community benefits is questionable. The people in South Africa and Africa whose natural spaces and livelihoods the schemes are meant to support – and who are the least responsible for climate change – have essentially losing out.
