Inside the billion-dollar market for junk carbon offsets

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A new investigation shows dozens of global companies rely on purchases of some of the cheapest and least-effective carbon offsets to burnish their green credentials.

. Some of these big brands, including Delta Air Lines and Credit Suisse, even claim to be operating as “carbon neutral” businesses as a result.

And from an accounting perspective, the impact is the same. An airline that switches to sustainable aviation fuels, for instance, will probably spend much more to lower its own emissions than the cost of purchasing offsets generated by someone else. A three-part Bloomberg Green series looks closely at sellers, verifiers and buyers that make up the complete transaction stack for these hollow offsets. The investigation published today traces the biggest buyers, analysing more than 215,000 transactions last year to show that about 40 per cent of the total came from renewable-energy offsets.

It sounds like an encouraging development, taking money from polluters to help pay for the deployment of more clean energy. But renewable-energy projects rarely need the additional sums that offsets generate, especially now that solar is the cheapest source of new energy in most of the world. Most of the revenue from renewable-energy projects comes from selling clean electricity, with only a small fraction from selling offsets.

 

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