Carbon offsets undermining climate action, say global charities

About 80 global charities, including Oxfam, Amnesty International, and Greenpeace, have called for scrapping carbon offsets in both voluntary and government-mandated climate action strategies.

Carbon offsets, often touted as a way to achieve climate goals, come with their own limitations. These projects relocate emissions reductions, instead of eliminating them from the atmosphere, which essentially allows companies to continue emitting greenhouse gases while compensating elsewhere, the charities said in the joint statement published on 2 July.

“We call for scientific, ambitious, equitable, robust, credible and transparent rules around carbon accounting and corporate climate target setting. Voluntary and regulatory frameworks on climate transition planning must exclude offsetting,” the letter said.

Platts, part of S&P Global Commodity Insights, assessed current year nature-based avoidance carbon credits at $3.70 per metric ton of CO2 equivalent (mtCO2e) on 1 July, slightly higher than a record low of $2.70/mtCO2e seen in most of February this year.

Nature-based avoidance carbon credits refer to credits generated by activities that prevent the release of CO2, such as forest conservation.

“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,” the letter added. “They also risk disincentivizing the significant investments needed to ensure profound changes to corporate value chains and economic systems.”

The opposition by global non-profits comes in response to an announcement by the Science Based Targets Initiative (SBTi), which guides companies on setting climate-aligned targets.

SBTi shared its plans to update its policies on how firms can utilize “environmental attribute certificates,” including carbon credits, to achieve their goals.

Currently, companies aiming for net-zero emissions under the SBTi’s standards can only use carbon offsets for 10% of their total emissions.
Now that a potential increase in the 10% limit is being considered, the non-profits have overwhelmingly opposed this move.

They argued that the vast majority of historical greenhouse gas emissions, over 70%, could be traced back to just 78 companies, both private and state-owned.

These entities, they said, share a responsibility to directly reduce their emissions with their own operations, instead of relying on carbon offsets as a shortcut.