Among the national and international projects for environmental and climatic protection, “carbon credits” appear to be a sustainable strategy, with the goal of reducing or absorbing greenhouse gases responsable for the global climate warming.
For its nature, the carbon credit is the basis of a business model aims to the fight against the global warming, so it is a potential strategic investment for companies that emit greenhouse gases because they can directly contribute to environmental protection projects and remaining in line with the Paris goals.
But it is a product based on a system that introduces also dark sides, carefully evaluated by the market.

TO BUY CARBON-DIOXIDE, WHAT IS THE CARBON CREDIT

A carbon credit is a title whose value is equivalent to a ton of CO2 not emitted or that is absorbed thanks to a care and storage project of a forest area with the goal of reducing and reabsorbing CO2 global emissions and other greenhouse gases. The carbon credit is traded to compensate for the emission of a ton of CO2, through the realization of a development project with a certification provided by a third party.

These projects are realized mostly in developing country and in areas with risk of deforestation that, thanks to the investment in preservation, on one hand let the forest keep doing its “job” of carbon sink, on the other hand they give new support to the economic and social welfare of the local populations.

If a company invests in these types of projects, it could determine the tons of CO2 that the saved forest will absorbe every year compared to a scenario of deforestation. The calculation produces carbon credits whose value is determined by the market and can be bought or sold in a climate finance system. Who buys carbon credits could use them to compensate high emissions and to put the carbon neutrality label on their products and services.

TEN YEARS OF GROWTH AND GOOD INTENTIONS

The carbon credits’s investment scheme was born in 2013 during COP19 in Warsaw, the climate change conference of the United Nations. As its acronym Redd+ indicates (Reducing Emissions from Deforestation and forsest Degradation in Developing countries) it is a mechanism to encourage developing countries to reduce emissions due to deforestation and forest degradation processes.

Many of the biggest world companies have used carbon credits sold on the unregulated market (there is also a regulated one), grown into a two billion dollar market in 2021 with 20USD per ton of CO2 was. But it seems that all that glitters is not gold, and recent scandals about their real impact on the ecosystems choosed for the projects, have have weaked their credibility towards the investors.

JOURNALISTIC INQUIRIES

Today we start to wonder about the real effects of carbon credits on the climate change.
International journalistic inquiries, published earlier this year by The Guardian, Die Zeit and SourceMaterial, have found that 94% of the carbon offsets linked to the Amazon forest provided by Verra, the non-profit organization responsible to certify the quality of the carbon credits production’s projects, were worthless. In addition, those represented the 40% of the global credits approved by the organization.

The different forests protection projects , basically , had not produced the expected savings on harmful emissions.

These investigations also state that, in many cases, the risk of deforestation was overestimated while the choice of protecting one area of forest rather than another could push to deforest non-protected areas in other parts of the world, where local and indigenous communities are often ejected from their ecosystems because deemed as a threat.

In this way this type of investment was lent to greenwashing operations from companies that declared themselves sustainable or certified their activities as “zero-emissions”, when they wasn’t.
For speculators this situation could mean losing billions because it has affected the credibility of certifications, that for some have become “junk credits”, and has made the collapse of their value under the weight of their unreliability increasingly probable.

FUTURE SCENARIOS

So, how the companies looking to reach the “net zero” goal (that is the balance between the emissions of their own activities and the emissions “captured” through environmental protection initiatives, like reforestation) are going to move in the next future?

All scenarios are still open, what’s certain is that, for the forest’s sake and for the sake of the Framework Convention of the United Nations for climate change, it becomes urgent to radically rethink the carbon market mechanisms and the goals of the actions that must take inspirations from “nature based solutions”: a serie of actions inspired, supported or litterally copied from nature, that turns into projects that generate credits through the protection, the sustainable management or the restoration of natural ecosystems.