Do Carbon Offsets Actually Increase Emissions?

A study released by the Stockholm Environmental Institute (SEI) has revealed serious issues with the environmental integrity of carbon credit issued under Joint Implementation (JI). According to the review, about three-quarters of the carbon credits issued under JI may have actually increased emissions by about 600 million metric tons.

JI enables countries with emission reduction commitments under the Kyoto Protocol to generate Emission Reduction Units (ERUs) from greenhouse gas reduction projects and transfer them to other countries. As of March 2015, almost 872 million ERUs had been issued under JI, but in a random sample of 60 JI projects, 73 percent of the offsets came from projects that likely would have proceeded even without carbon revenues. Altogether, the study found that about 80 percent of ERUs came from project types of low or questionable environmental integrity and more than 95 percent of ERUs were issued by countries with significant allowance surpluses of allowances.

Ukraine and Russia have benefited the most from JI, issuing a combined total of 90 percent of ERUs. Numerous projects registered by Ukraine and Russian in 2011 and 2012 had started long before JI and were not motivated by carbon credits, according to one of the study co-authors.

The massive issuance of questionable credits toward the end of the first Kyoto commitment period contributed to the collapse of credit prices, potentially harming legitimate carbon projects that required carbon revenues to be viable.

SEI’s review has implications for the ongoing negotiations for a new global climate agreement under the United Nations Framework Convention on Climate Change (UNFCCC). The study highlights the need to ensure that countries’ pledges under the new climate agreement are truly ambitious and to establish international accounting rules and robust oversight of international transfers of carbon units, so the problems that have arisen with JI are not repeated under a new climate regime.

Photo credit: smokestacks in Moscow via Shutterstock