Carbon credits sold to fund projects to tackle global warming almost never accomplished their goals of reducing carbon dioxide (CO2) emissions, according to a new report funded by the European Union.
Carbon credits used in a United Nations program often went to projects that exaggerated their potential to reduce greenhouse gas emissions, finds. The report recommends the European Union reduce its reliance on credits to reduce emissions.
“Overall, our results suggest that 85 percent of the projects covered in this analysis and 73 percent of the potential 2013-2020 Certified Emissions Reduction (CER) supply have a low likelihood that emission reductions are additional and are not over-estimated,” the report reads, adding: “Only 2 percent of the projects and 7 percent of potential CER supply have a high likelihood of ensuring that emission reductions are additional and are not over-estimated.”
The EU commissioned the report to audit the effectiveness of the Kyoto Protocol’s Clean Development Mechanism (CDM) in preparation for similar programs being put in place under the Paris agreement. The Paris agreement went into effect in 2016, and relies on individual countries voluntarily cutting emissions. Some countries plan to use a similar international credit schemes to CERs, as they are approved by the agreement but their implementation methods are never clearly defined.
CDM handed out CERs to companies or individuals who invested in approved projects meant to mitigate global warming, like wind turbines or electric vehicles. The idea is for people in wealthier countries to fund projects in poor countries to curb global warming and spur development.
Under this system, a German power plant, , could get CERs for funding a UN-approved wind turbine project in India.
That Indian wind farm would almost certainly have been built regardless, even without CERs purchased by the Germans, according to the EU’s report.
But the German power plant would still buy CERs because purchasing them may be cheaper than reducing CO2 emissions. EU companies are also required by law to reduce their CO2 emissions — buying CERs is one way to comply.
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