“Carbon offsets” – paying for someone else’s climate action, while counting it as your own― have been increasingly challenged over the past few years. Yet just as they were sputtering on the deathbed of climate credibility, the directors of the UN-backed Science Based Targets initiative (SBTi), the main global standard-setting body for corporate climate plans, gave them some life-saving injections. Without any of its usual consultation and verification mechanisms, the SBTi board announced this April that corporations will be able to use carbon offsets emissions to meet their climate targets.

As the outraged SBTi staff and advisers who responded to the announcement by (successfully) calling on the body’s CEO to resign know, allowing carbon offsets at scale is simply greenwashing. Buying carbon credits from, say, faraway tree-planting projects allows corporations to falsely position themselves as sustainability leaders while avoiding any meaningful change in their polluting business models. Moreover, an Oxfam study found that there is just not enough land available for the amount of offsetting that would be necessary to achieve net zero.

In the last decade, the SBTi has developed into a credible, robust, and well-recognised verification organisation. The body requires corporations to implement emissions cuts by at least 90% by 2050, which will be essential in keeping the 1.5C target alive. And, before April, it took the sensible position of seeing a role for carbon removals only in relation to very hard-to-abate emissions, such as some parts of the iron and steel industry.

This core principle, however, is now at stake – along with the integrity of the SBTi.

Growing projects, growing concerns

Proponents of carbon markets argue that the money that flows through them from polluting corporations provide an urgent stopgap for Global South countries’ huge need for climate finance. But this is a false argument. Unregulated carbon markets primarily serve corporations who seek the largest – and cheapest – way to meet their emissions reduction targets. This leads to the majority of projects being low quality, while their proceeds line the pockets of developers and, at best, treasury coffers – not those of communities worst affected by climate breakdown.

Despite efforts to introduce stringent social and environmental criteria in offset markets, the proliferation and scale of some deals are breath-taking. At the end of last year, for instance, the Dubai-based Blue Carbon LLC signed MoUs with at least five African countries that would see it harvest carbon credits on forested land the size of the UK.

At the same time, the risks associated with these projects are becoming more widely known and challenged. The UN Special Rapporteur on the Rights of Indigenous Peoples recently called for a moratorium of carbon offsetting deals to stop human rights violations. In Liberia, communities resisted the deal with Blue Carbon, fearing it would take away community land ownership and violate peoples’ legal right to provide free, prior and informed consent for developments on their land. And in Kenya, the Kenyan Human Rights Commission (KHRC) reported sexual abuse at the Kasigau carbon offset project, leading the standard-setting body Verra to temporarily suspend the project.

Opportunities are also arising as many governments discuss or enforce new carbon market regulations. In Zimbabwe, for instance, new carbon credits regulation of 2023 requires that 30% of proceeds from carbon credit trading goes towards an “environment levy”, of which 55% is to be used for climate adaptation and low carbon projects and 5% for loss and damage. In a previous iteration, the government had further proposed that developers allocate 25% of profits to local communities. We hope that future consultations will reintroduce these obligations and protect local people.

A trick by rich countries and corporations

Pressure from some large corporations to allow carbon offsetting at scale is no surprise. Reducing emissions in their supply chains is hard, and offsetting is much easier.

Global North governments are lobbying hard too. Former US Climate Envoy John Kerry’s office reportedly heavily lobbied the SBTi to reverse its opposition to the use of carbon credits in order to help boost the Energy Transition Accelerator, a US plan for poorer countries to issue carbon credits to corporations in return for funding to help them shift to clean energy.

Promoting carbon markets and branding them as “climate finance” is just another trick from rich countries and corporations alike to avoid taking responsibility for the climate chaos they have created and continue to profit from at the expense of people and our planet.

Corporations and funders who stand for real climate action should counter recent lobbying and ensure the SBTi stays focused on its core principle of following climate science and thus limiting the use of carbon offsets to where there is really no other way.

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