The global voluntary carbon market (VCM) sector has exploded in recent years, and India has been an integral part of this boom. The country has become the world’s second-largest source of carbon offsets in the voluntary carbon market. As of June 2023, over 1,400 projects are registered or are under various stages of consideration in the two major crediting programmes — Verra and Gold Standard. Indian projects account for one-fifth of the total carbon credits issued under these two programmes.
But this boom brings with it a strong whiff of fraud, finds a new investigative report by Centre for Science and Environment (CSE) and Down To Earth. ‘Discredited: Does the Voluntary Carbon Market Benefit People and Climate in India?’ begins by asking some fundamental questions: does VCM help in the reduction of global GHG emissions? Does it guarantee financial benefits to carbon-sequestering communities and sectors which would otherwise not get financing?
With its focus on the supply side of VCM – projects on the ground that are doing the heavy lifting of carbon avoidance or sequestration, while companies abroad buy credits and claim their net zero targets – the CSE-DTE investigation has zeroed in on hundreds of projects in Verra and Gold Standard’s registries and communicated with their developers. The investigation team also visited close to 40 locations in four Indian states for an on-ground assessment, speaking to project developers, farmers, rural households, activists, and local NGOs.
The team’s expose is an eye-opener: it shows how there are no rules in this market which is under a shroud of secrecy and opaque at best. They go as far as suggesting that some of these could actually increase carbon emissions! And its not just about India too. It highlights how a report by The Guardian, based on an investigation conducted in association with Die Ziet (German Weekly) and SourceMaterial, on Verra’s rainforest-based credit programme raised a storm in voluntary carbon markets in early 2023.
The investigation revealed that over 90 per cent of rainforest offset credits certified by Verra and retired by corporations like Disney, Shell and Gucci were not representing emission reductions and were essentially hot air. The investigation was based on three studies conducted on REDD+ projects. Two of these studies investigated 58 of the 87 Verra approved REDD+ projects. 21 projects were found to have no climate benefit and others were similarly noted to be less efficient
“One of the fundamental flaws of voluntary carbon markets is that there is no basis of the price put on a project; at times it is inflated and at times it is so low that the project becomes unviable. It seems that the entire purpose of voluntary carbon markets is to serve the interests of project developers, auditors and all the others who make a cut in this carbon business.
The current carbon markets could end up increasing emissions in the world. The buyers of credit—say an airline company that has
assured its customers to offset their carbon footprint or a food company that has declared itself net-zero—continue to emit; they
even increase their emissions, saying that they have bought credits. But as these credits have been over-estimated or do not really exist, the reductions are notional. This is a double-jeopardy. This is exactly what a climate-risked world does not need”
All of this, even as the leading firm in the India market EKI Energy Services, goes through a serious issue of corporate governance in the past year does not help inspire confidence at all.
The report proposes multiple steps that need to be taken to clear up the odour around VCMs.
Indian ethanol conglomerate Praj Industries has announced that it will be supplying technology for Brazilian…
Gregory Krupnikovs, a leading authority in the burgeoning biogas sector worldwide, serves as the founder…
Asahi India Glass Limited (AIS), and INOX Air Products (INOXAP), entered into a 20-year offtake…
Green Power International and Ecofinity Solutions have collaborated to promote Compressed Biogas (CBG) in India…
Gulshan Polyols Limited has received a 'Consent to Operate' (CTO) from the Pollution Control Board…
Tata Steel Special Economic Zone Limited (TSSEZL) and HHP Five Private Limited (Hygenco) have signed…