Companies are turning to forest credits in the race for carbon neutrality. Defenders are worried about “greenwashing”.

This article was produced in partnership with the Rainforest Investigations Network at the Pulitzer Center.

In the forests of Guatemala, China and Scotland, oil giant Royal Dutch Shell is planting tens of thousands of trees that suck greenhouse gases out of the air, allowing customers who buy its fuel to pretend their driving is carbon neutral – at least on paper.

In Brazil, Amazon is paying to help small-scale farmers restore degraded land in the rainforest that bears the company’s name.

And in Asia, Delta Air Lines is spending $ 30 million to offset pollution from its jets, protecting half a million acres in an Indonesian bog forest and Cambodian wildlife sanctuary.

Officials in the state of Para, in northern Brazil, inspect a deforested area in the Amazon rainforest during surveillance in the municipality of Pacaja, 620 km from the capital Belem, on September 22, 2021. Evaristo Sa / AFP via Getty Images file

With every investment, companies accumulate “credits” for the forests they save or restore, tokens representing a set amount of carbon dioxide apparently kept out of the atmosphere by storing it safely in trees.

Demand for forestry credits is expected to explode in the years to come, as image-conscious companies rush to become “net zero”. This has prompted climate finance consultants and environmental groups to sound the alarm bells about a system they say is not delivering promised carbon reductions, but offers companies a convenient way to save money. ‘avoid the harder work of actually reducing emissions.

“This is the next big breakthrough in greenwashing – and let’s not be fooled,” the Greenpeace group recently said on its blog.

At first glance, the exchange appears to be a win-win: huge sums of money are funneled into environmental projects, mostly in poor countries with less capacity to provide forest protection on a large scale on their own. Companies who court climate-conscious investors may say they are reducing their carbon footprint to zero, offsetting any emissions they cannot eliminate from their own operations with CO2 reductions elsewhere on the planet.

Yet the system, which is part of what is known as the “voluntary carbon market,” is rife with challenges, hazy mathematics, and hard-to-prove claims.

Most of the time, credits are set aside for existing forests that already sequester carbon dioxide, public data from Carbon Records shows, assuming they would otherwise be felled. In some cases, forests that generated credits bought by Microsoft and other big players have burned in forest fires, releasing their carbon dioxide stores into the air.

Exponential growth

In recent years, a long list of Fortune 500 companies have started buying credits for forestry projects, according to an NBC News review of SEC files and the companies’ environmental, social and corporate governance disclosures.

The credit market is now estimated to be in the hundreds of millions of dollars, a number that grows year by year as a cottage industry of selling, exchanging and authenticating forest credits takes shape.

Growth could soon be exponential. Mark Carney, former Governor of the Bank of England and United Nations climate finance envoy, predicted that the carbon offsetting market could soon reach $ 100 billion a year, although some of those credits may come from carbon capture and other measures rather than forests.

The market is also set to get a big boost from deals reached in November at the UN climate summit COP26 in Glasgow, Scotland, where more than 100 world leaders pledged to end and reverse the climate. deforestation by the end of this decade. At the same summit, leaders also reached a major agreement setting global rules for carbon markets, a move likely to involve even more major players in the game.

Still, a major concern is that big polluters, rather than actually reducing their emissions from energy and fossil fuels, will go the simpler and often cheaper route of paying to remove them, said Thiago Chagas, legal consultant at Climate Focus, a non-profit organization. think tank that advises governments and businesses on climate policy, which has studied the quality of a UN-backed brand of credits known as REDD +.

“The greenwashing aspect is that companies just offset a large majority of their emissions and then say they’re carbon neutral,” Thiago told NBC News. “This is something that we should not allow any more at this point. … They have to do their homework, they have to reduce their own emissions internally.

Not all forest credits are built the same.

There are multiple competing “certification” standards and a dizzying number of organizations or businesses acting as middlemen, authenticating alleged greenhouse gas reductions and connecting credit buyers and sellers. Measuring ground activity in remote rainforests can be incredibly difficult.

“There’s a whole verification process that involves a third-party auditor, but there are some weird things about it,” said Dan Nepstad, environmentalist and president of the Earth Innovation Institute. “It is the developer of the carbon project who engages the auditors. The auditors therefore work for the company which would really benefit from a good result.

This means that for businesses to know that the credits they buy are legitimate, it is up to them to do their own due diligence, Nepstad said.

Delta’s projects in Rimba Raya Biodiversity Reserve in Indonesia and Keo Seima Wildlife Sanctuary in Cambodia provide funds to local and indigenous communities to carry out forest conservation programs. The company says that by 2020, these projects reduced CO2 emissions by 13 million metric tonnes, helping it achieve its goal of becoming “the world’s first carbon-neutral airline.”

“All of Delta’s compensation projects are independently audited against major third-party standards,” the airline said. Delta says it has also invested in wetland restoration as part of a $ 1 billion commitment to mitigate its emissions.

Yet, there is no single, universally accepted methodology for counting the amount of carbon a given project is keeping out of the atmosphere.

If a company, for example, pays landowners not to cut down a forest they didn’t plan to cut anyway, there is no real savings to the planet – a problem known as name of “additionality”. Projects are meant to be measured against a “benchmark” of what would likely have happened if payments had never occurred. But those baselines are often inflated, experts say.

Britaldo Soares-Filho, professor of cartography and geosciences at the Brazilian Federal University of Minas Gerais, said that plans to “preserve” forests were much riskier than, say, planting new trees where there is none. had none before.

“Restoration projects are something that you can really measure. You start from zero, and then you can measure, over time, how much carbon is fixed in trees and soil. It’s closer to reality, ”said Soares-Filho. “The point is, when you say, ‘I am protecting this area that might be deforested in the future,’ you are speculating now. “

There is also the problem of “leaks” – when a company pays landowners not to cut forest A, but they cut forest B instead. And the problem of “permanence” – when a carbon-sequestering forest is kept intact one year through purchased credits, but is felled the following year.

One model, a start-up credit market called NCX, offers individual landowners a chance to generate and be paid for credits to defer harvesting trees on their property for one year at a time, rather than the 100-year traditional standard. If the landowners cut down all the trees the following year, they are already paid.

But Zack Parisa, CEO and founder of the company, argued that since carbon dioxide stays in the atmosphere for a long time, it traps more and more heat, even delays the release of carbon into the air for a year. has value. He said this is all the more true as scientists say it is the pivotal decade for humanity to avoid the worst effects of global warming.

“When this is the case, landowners do not have to commit to these multigenerational contracts which are subject to natural disturbances, fires, hurricanes,” said Parisa. “You can bring a lot more participation to the table, a lot more scale immediately, right now, in this critical decade. “

Meanwhile, the forest credit market is paving the way for a massive injection of corporate funds into ecological projects that might otherwise not be funded: restoring dense forests in India, agroforestry in Peru, and preserving forests in the sanctuary. of wild birds from Hawk Mountain in Pennsylvania.

Nepstad, from the Earth Innovation Institute, said the forest credit market is at a crossroads as it moves to a larger scale in which states and provinces play a larger role.

“At the end of the day, these are programs that lack funding,” said Nepstad. “The world has been so focused on making sure the funds don’t flow if there aren’t just incredibly risk-free emission reductions behind them, instead of saying, let’s just circulate the money. ‘money and make sure there are some pretty tough credibility measures in place. “

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