Examples of criticisms:
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These criticisms are probably the most immediate concern for most carbon credit buyers. It would certainly be problematic if carbon credits are not what they purport to be, which is an exclusive claim to a full metric tonne of additional, permanent CO2 mitigation (or its equivalent), without any adverse social or environmental impacts (see High Quality Credits). Unfortunately, despite the efforts of carbon crediting programs, a number of independent studies have identified serious problems with some types of carbon credits. For example, studies in the last decade of two international crediting program established under the Kyoto Protocol – the Clean Development Mechanism (CDM) and Joint Implementation (JI) – suggested that up to 60-70% of their carbon credits may not have represented valid avoided emissions or enhanced removals.[1] Other critiques highlighted instances of carbon crediting projects that harmed local communities or resulted in broader environmental damage.[2]
More recently, a 2024 survey of peer-reviewed analyses found that fewer than 16% of the credits issued to certain types of projects represent “real” greenhouse gas mitigation (i.e., meeting all criteria for a high-quality credit).[3] The survey focused on problematic project categories (going back over a decade), which are not necessarily representative of today’s market. Still, the survey reveals persistent concerns about carbon credit quality that have yet to be fully addressed.
These critiques are troubling and should give pause to prospective buyers of carbon credits. However, buyers can employ a number of strategies to improve their likelihood of acquiring higher-quality credits. We explain the essential elements of a “high-quality” carbon credit here and indicate some basic questions buyers can ask to vet potential purchases. In Strategies for Avoiding Lower-Quality Credits, we provide some general strategies for avoiding “low-quality” carbon credits.
[1] The primary concern is that a large number of carbon credits come from energy sector projects that have significant sources of other revenue besides carbon credits, suggesting that they would have happened anyway and do not represent additional mitigation. Other identified issues include concerns about over-estimation of avoided emissions or enhanced removals, e.g., for industrial gas destruction and other project types (Alexeew et al. 2010; Cames et al. 2016; Gillenwater and Seres 2011; Haya and Parekh 2011; Kollmuss et al. 2015; Kollmuss and Lazarus 2010; Lazarus et al. 2012; Ruthner et al. 2011; Schneider 2009; Schneider et al. 2010; Spalding-Fecher et al. 2012).
[2] See, for example, Dufrasne (2018) as well as here.
[3] See Probst, B. S., Toetzke, M., Kontoleon, A., Díaz Anadón, L., Minx, J. C., et al. (2024). Systematic assessment of the achieved emission reductions of carbon crediting projects. Nature Communications, 15(1). 9562. DOI:10.1038/s41467-024-53645-z.