As the climate crisis worsens and inches closer to a global catastrophe, the world is desperate to find solutions and quick fixes. Climate catastrophe is no longer a distant threat, it is our present reality.
It is manifesting as a litany of disasters from destructive wildfires reducing homes and forests to ash, to devastating storms and floods washing away livelihoods and claiming lives.
It’s easy to understand the desperation for quick-fix solutions.
Carbon market mechanisms have long been the favourite climate “solution” among parts of the private sector in the Global North, and some governments. This is where countries or companies buy “carbon credits” from countries or communities in the Global South to offset their emissions. It sounds appealing, and those in favour argue countries or companies unable to cut their emissions in the short term can fund climate action for those bearing the brunt of the crisis.
However, the reality of carbon markets falls short of this rosy picture.
Carbon market projects almost always fail to provide any real climate benefit. Worse, they have a long history of subjecting host communities to various abuses and human rights violations. They simply do not work. And even if they could provide some relief, the idea that the benefit would somehow make ongoing emissions elsewhere acceptable as the world careers towards nearly 3 degrees of warming is indefensible.
Multiple investigations have shown most carbon markets do not represent real emission reductions. A study into Verra, a leading crediting programme, found more than 90 per cent of its rainforest offsets were “phantom credits” – in other words, worthless for the climate.
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Another review by Corporate Accountability and the Guardian found 39 of the top 50 projects were probably “junk”. A 2024 Nature Communications study, covering about a fifth of all issued credits, found that less than 16 per cent of those credits represented real reductions in emissions.
Even when carbon markets deliver the promised climate action, most of the time the buyer uses the credit for an offset. For example, a major oil company or petrostate might claim “net zero” progress by funding a tree-planting initiative in Kenya. But while a few thousand trees are planted in the Global South, oil drilling and fossil fuel expansion continue in the Global North. The emissions aren’t reduced, they’re just offset on paper. The climate still loses, but the polluter gets to look green.
Some climate action may be happening but it is in the context of emissions being allowed elsewhere – just greenwashed to look acceptable.
While many projects claim they will bring benefits to a region, including jobs or other investments, they not only have a history of failing to deliver for communities, but also have a record of violence, displacement, abuse and other injustices.
A Carbon Brief investigation has found more than 100 documented cases of harm to host communities over the past five years. Communities are displaced from their land or lose access to forest in the name of stopping deforestation, though the local community is almost never the cause of the deforestation.
Recently published ActionAid USA research, Caution Required: Protecting Communities from Carbon Markets, focuses on Kenya, which has the largest and oldest carbon projects in Africa. Many of these illustrate the problems with exaggeration of emissions avoided, carbon sequestered and uncertainty of carbon credit value as well as risks to communities.
Of the 317 carbon projects registered with voluntary carbon markets in Kenya, most are small cookstoves or water-filtration projects. While they may offer health benefits, studies show these projects often exaggerate climate impact by overstating the uptake of cookstoves and water filters – and firewood saved. Private companies and organisations that implement these projects and purchase the credits typically benefit far more than the communities.
Most of Kenya’s largest carbon projects involve attempts to alter land use and control. The largest carbon credit project is the Kasigau Wildlife Corridor Project, run by Wildlife Works, a company originating in the United States. The project claims to avoid carbon emissions by protecting against deforestation, but there are serious concerns over inflated emissions baselines, unfair revenue distribution and community marginalisation.
An investigation by the Kenyan Human Rights Commission and the Dutch organisation SOMO found there was a significant pattern of sexual harassment and abuse by senior Wildlife Works employees and rangers of local women, female employees and the wives of junior male workers.
Another big project, the Northern Kenya Grasslands Carbon Project, which covers nearly two million hectares, has been praised internationally despite serious human rights concerns.
The overall experience of projects in Kenya was that they lacked legitimate, informed and prior consultation with affected communities. They were not consistently established with regard to community land rights laws and UN land tenure guidelines. Additionally, “middlemen” and technical consultants took much of the economic benefit before it reached communities.
Unfortunately, this dismal record in the Global South has not deterred interest in carbon markets or carbon credits. Buyers – typically corporations or governments under pressure to reduce emissions – are generally looking to purchase credits for carbon offsets. On the other hand, sellers – often poorer Global South governments or local communities – are generally not motivated by supposed climate benefits, but rather by the need for revenue.
Most experts agree the world will cross the 1.5-degree threshold. There is no longer enough time to decarbonise and reduce emissions before crossing the line. Every fraction of a degree of warming worsens impacts, increases devastation, and risks tipping points that collapse ecosystems and drive more climate change. Current policies put the world on track for a near three-degree rise, which would be catastrophic. Yet instead of urgent systemic change, carbon offsets offer a false solution, letting polluters claim progress without cutting emissions at source.
Carbon markets persist due to the failure to date to provide adequate and quality climate finance, a key pillar of the United Nations Framework Convention on Climate Change and the Paris Agreement. Far too little money is flowing.
Developed countries promised $100 billion a year in climate finance by 2020 as a good-faith downpayment on what everyone acknowledged was a far greater need. That money was not only late, but what was provided was overwhelmingly in the form of loans, further ratcheting up debt, and double-counted development assistance.
When setting the new climate finance target at Cop29 in Baku, developed countries refused to engage in a real discussion of the scale of the need for climate finance or have a conversation about the quality of that finance. The resulting goal was a profound disappointment, with vague references to blended finance and more ambition through the private sector. This has deeply strained climate negotiations.
ActionAid is calling for an end to offsets as a climate strategy. Carbon markets are not climate finance and do not lessen the climate finance obligations of rich countries, responsible for 92 per cent of carbon dioxide emissions.
Instead of false promises, we need real solutions: direct emissions cut at source, progressive taxation on polluters, public climate finance that supports just transitions, and investments in renewable energy and adaptation. Climate justice means putting people and the planet before profit.
Communities are being led towards carbon markets to make up for the lack of real climate finance, all while climate impacts are increasing and climate action is becoming more urgent. Therefore, carbon markets represent a policy failure and a moral failure. They present a profound risk to communities that require extreme caution. Communities deserve real support, and governments need the resources to provide public services, not false promises built on continued pollution.
For those engaged in carbon markets, governments must ensure land rights and land tenure are protected and not given away as part of any carbon market project. Legal safeguards need to ensure communities are not left holding the bag for failed credits.
In the midst of a climate crisis that is wreaking havoc on the planet, the science is clear: there is no room for offsets in a 1.5-degree world. No amount of wishing or hoping for an imaginary carbon unicorn will make it true.
Rapid decarbonisation and zero deforestation is the only way to not overshoot the carbon budget. And a world in overshoot is not one we want to see.
Karol Balfe is chief executive of ActionAid Ireland
