Some of the world’s most profitable – and most polluting corporations – have invested in carbon offset projects that have fundamental failings and are “probably junk”, suggesting industry claims about greenhouse gas reductions were likely overblown, according to new analysis.
Delta, Gucci, Volkswagen, ExxonMobil, Disney, easyJet and Nestlé are among the major corporations to have purchased millions of carbon credits from climate friendly projects that are “likely junk” or worthless when it comes to offsetting their greenhouse gas emissions, according to a classification system developed by Corporate Accountability, a non-profit, transnational corporate watchdog.
However, the multibillion-dollar voluntary carbon trading industry is still championed by many corporations including oil and gas majors, airlines, automakers, tourism, fast-food and beverage brands, fashion houses, banks and tech firms as the bedrock of climate action – a way of claiming to reduce their greenhouse gas footprint while continuing to rely on fossil fuels and unsustainable supply chains.
The fossil fuel industry is by far the largest investor in the world’s most popular 50 CO2 offsetting schemes. At least 43% of the 81 million CO2 credits purchased by the oil and gas majors are for projects that have at least one fundamental flaw and are “probably junk”, according to the analysis.
The transport industry, which accounts for about a fifth of all global planet-warming emissions, has also relied heavily on carbon offsetting projects to meet climate goals. Just over 42% of the total credits (55 million) purchased by airlines and 38% purchased by automakers (21 million) for the top 50 projects are likely worthless at reducing emissions, the analysis found.
Climate experts say that the carbon trading market has failed to produce the promised planetary benefits, delayed the transition away from oil, gas and coal, and caused harm to forests and communities in developing countries where most offset projects are located.
“Overall, carbon offsets are, according to most expert analyses, neither credible nor scalable to the urgency and scale of the carbon dioxide problem,” said Richard Heede, co-director of the Climate Accountability Institute, a nonprofit research and education group.
“This research once again shows that big corporate polluters claiming climate credentials are the main buyers of junk credits. But racking up carbon credits doesn’t make you a climate leader. Cutting fossil fuels does. We can’t offset our way to a safe climate future,” said Erika Lennon, senior attorney at the Centre for International Environmental Law (Ciel).
“For all the talk about carbon credits accelerating climate action, they are actually greenwashing climate destruction.”