Leaked emails show that one French broker, EcoAct - whose clients include Natwest, easyJet, Air France and Coca-Cola - was in late 2021 offering credits from the Ribeirinhos initiative, a forest protection project in northern Brazil, for £15 ($20) apiece. “This investigation shows again why transparency must be improved.”ĭespite its rapid expansion, the carbon market “still operates like a cottage industry”, said Adrian Rimmer, an offsetting specialist at Finsbury Glover Hering, a public relations consultancy. “We still cannot trust that money used to purchase carbon credits really is used to finance extra climate action,” he said. Opacity and under-regulation mean the conservation projects that should benefit most from the boom are often missing out, according to Gilles Dufrasne of Carbon Market Watch, a non-profit that analyses the offsetting sector. Commodities giants Vitol, Glencore, and Trafigura all opened carbon trading desks last year. Transactions for 2021 are estimated at a record-breaking $1bn and Mark Carney, a former Bank of England governor and a UN climate envoy, has led a task force looking to expand the sector. Offsetting is seen by many policymakers as a vital tool to slow climate change and trade is flourishing. “The idea that you’re just paying a large airline to enrich an investment fund is probably not what the customer booking a holiday had in mind,” said Kelsey Perlman, a forest and climate specialist at Fern, a campaign group. The broker rejected the suggestion that it was making “large and unfair margins at the expense of project developers” when contacted by Unearthed and SourceMaterial.Ī consequence of the lack of transparency in the market is that consumers, who think they are paying to offset their emissions, are often sending the bulk of their payments to companies that do nothing to combat climate change. But in the same exchange, the broker offered credits at a price seven times higher than they had originally paid. In one example, leaked emails show a broker claiming to a potential buyer that “ typically 85-95%” of any purchase price goes to the project owner. The idea that you’re just paying a large airline to enrich an investment fund is probably not what the customer booking a holiday had in mindĬarbon markets are notoriously opaque and prices are secret but estimates by intelligence firm Allied Offsets, shared with Unearthed and SourceMaterial, identified almost 250 projects where brokers resold credits for at least three times the purchase price. Payments for carbon offsets routinely end up in the hands of middlemen instead of the conservationists they are designed to fund.Ī joint investigation by Unearthed and SourceMaterial found brokers buying carbon credits from forestry projects in poorer countries and selling them on to consumers and companies, including airlines and oil firms, at inflated prices.
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