This is part 4/6 of the Carbon Sequence. If you haven't read the first half of the series yet, it might make sense to do so first. Start here.
A covert shift in agenda?
Carbon offset could be a cool idea – if it actually worked.
Relax, I am not saying that there aren’t some honest and upright initiatives that are using carbon credits constructively, like redirecting much needed money toward regenerative farming and other truly future-proof approaches to environmental action.
What I am questioning is the change that happens as soon as something becomes big enough for large market players to pay attention and invest their beloved and all-important money.
I am talking about the subtle shift when the narrative about truly good causes kinda stays the same, while the motivators and mechanisms behind it slowly change.
A story of fraud
I recently encountered an article in a German newspaper, the Zeit, that I got recommended to read by a friend.
Roughly translated, the title was A bouquet of empty promises1 and it was the story of two journalists that tried to get their entirely made-up flower store certified as CO₂-neutral. On the certifiers website, they just had to claim what they were doing and make up some numbers about their carbon economy and positive impact. There was never a prompt to prove anything, and noone coming around to check up on their claims.
After a few weeks, they received much anticipated affirmation. Their certification was granted, they were now a certified CO₂-neutral business.
The requirements for this attractive title? A few hundred bucks to pay, a willingness to lie, a lack of real change and not even a business to show – and voilà, you got a neat green sticker to put on things, impressing your imaginary environmentally conscious customers.
Maybe you could win some prizes with this, generate some publicity?
If it works with an imaginary business, this should easily work with a real business and a testing mindset around how much your spine can bend for a green sticker.
We have to face it: Carbon offset can be a business model entirely, and a crooked one at that, built on nothing but empty promises and a lack of integrity.
The hole at the bottom of the carbon offset market
A study by the European commission found that 85% of carbon offsets fail2.
Can we please chew on that number for a second? That’s the vast majority of them, failing at the only thing they were engineered to do.
Or were they?
I looked for the original EU study about the carbon offset failure and wanted to link it here, yet it has been removed. I couldn’t get my hands on it anywhere else, it has vanished from the web as far as I can tell.
Why?
Failure is kind of pre-engineered into the very nature of carbon offsets: One carbon credit allows it’s holder to emit one ton of CO₂.
Now, where does one carbon credit come from? It's created either by another ton of carbon that had been removed from the atmosphere, or by a ton of CO₂ that had never been released.
It’s by the second condition that you can notice the very core of carbon credits to be a mathematical fallacy that couldn’t possibly hold up to its purpose. You don’t prevent a ton of carbon to be emitted, you only postpone the moment of emission.
And even with the first condition – the allowance to emit one ton of CO₂ for one ton of CO₂ captured – you don’t reduce anything. It’s still only upward from here. And that's the 15% of carbon credits that are working as intended … probably.
What's with the other 85% that straight-up fail their purpose?
We see a heavy blunder at the very core of environmental action, the thing that is supposed to preserve out habitat. Even if we don’t cheat consumer trends with fake certificates, carbon offset doesn’t work.
Well, cui bono?
Fake progress, real profits
Consider the ineffectiveness of carbon offsets in light of their market momentum and you'll find the root of a life-threatening trend.
While we might be lured into thinking that the size of the carbon offset market signals that something is truly changing, nothing or only very little is happening.
Government projects3 involving millions over millions and even billions of dollars are failing. The market seems to be running on empty promises, at the very least partially.
It doesn't come as a surprise that some players cheat by just artifically increasing their carbon credits from bogus calculations, as this post on LinkedIn claimed.
What is happening instead?
Another highly profitable market has been created, decoupled from reality, making its players billions. Then again, the real money is not in the three- to fivefold investment returns that have already happened since the market crash 2020, but a hundredfold returns and beyond.
Sounds too crazy? I thought so, too.
Let’s bravely enter the realm of speculation for a moment, it might turn out to be enlightening: How to do this?
Pre-engineered returns
To reduce the amount of traded carbons credits, and by extension allowed CO₂ emissions, there will be an annual rate of of supply reduction. It had been 1.74% per year, now it’s a supply reduction of 2.2% per year4.
This is supposed to continuously reduce emissions … but wait, when 85% of offsets fail to reduce emissions, what’s the true effect of this reduction in carbon credit supply?
I’ll try: It’s the creation of a high performing asset with dwindling supply and probably unchanging or even rising demand, which just makes prices soar and puts billions in the pockets of those that were in the game early on.
So what do you find at the heart of the carbon credit market?
A mathematical guarantee for asset appreciation of historical proportions.
VIP investment opportunities … for the environment!
That’s not a faint future projection: Whoever got in early has already seen sizeable returns.
The price in regional markets vary, but all have seen significant appreciation. Then again, regional carbon markets might soon be a thing of the past, as Article 6 of the Paris Agreement paves the way to a single global carbon credit market.
Now, can you get into this market opportunity of a lifetime?
Well, no.
The issuance, redemption and trading of carbon credits has been limited almost entirely to regulated institutions.
But don’t despair: If you consider the opportunity to track your life for personal carbon credits, I guess you can somewhat get in on the fun – more on this in the next article.
Corporate Aikido
We have our effect on the world, no doubt.
But have we been led to look the wrong way?
It seems like a sincere and urgent problem of our time has been taken and perverted to make money. The messaging around this has of course been one of responsibility, solidarity and urgency.
Why is this crucial? I think we could be more effective in making true change when not being led astray by corporate Aikido and gaslit by ROI-driven interest.
By our trusting nature, we tend to project actions of integrity onto words of assurance.
Since we do this, it’s very tempting to market forces stick with words instead of actions. If words are enough to get the prize while actions go unnoticed, you could take the position that actually investing your energy into action is an economic fools move.
Why put in more than needed to create the desired effect? That’s inefficient.
Stick to polite green words engineered by spineless PR experts.
Blind to what's behind the curtain
Even policymakers often only read summaries and synthesis reports.
These are agreed upon by only a small number of government representatives, an opening to reflect certain political agenda’s more than the scientific content of the full report and the expertise of its authors.
This comes with an uneasy readiness to attack someones reputation should the carbon narrative questioned. Climate denier is a label that had actually been coined, however silly it is from a semantic point of view.
Do you see the room for corruption around this topic?
Do you also see the hysteria instead of calm differentiation and implementation of solutions?
Do you notice the heavy profits from shuffled paper where there should be dedicated action?
It’s here where I can’t help but get suspicious about what’s happening around me.
And I get more suspicious when I see measures for control and surveillance in the place of sincere environmental concern, but that's for the next article to tackle.
Next steps
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Got feedback on this article and would like to comment? You can do so on my LinkedIn post.
The next article of the Carbon Sequence will look into an abuse of the CO₂-narrative to advance surveillance instead of environmental action. Read it here.
Do we as an agency refuse to work for people with a focus on carbon credits? No!
If your business is working in the space of effective carbon offset, like funnelling much needed financial resources toward farmers making their transition to a regenerative framework, we are absolutely thrilled to work with you.
