Carbon credits are flawed. For now, they’re still necessary #660


Critics say carbon offsetting does more harm than good by allowing companies to exaggerate their climate progress. Proponents say it’s a necessary solution in the economy we live in today. Where does that leave fashion brands?

For years, fashion has touted carbon offsetting as one of the ways it was going green. Brands from Burberry to Gabriela Hearst have used carbon credits to claim carbon-neutral runway shows, and Gucci declared its entire supply chain and operations carbon-neutral in 2019.

Credits and offsetting are part of the carbon market, a voluntary mechanism that’s meant to help governments and companies, as well as individuals, lower their carbon footprint by funding projects to remove carbon from the atmosphere or prevent future emissions. Crucially, this is supposed to only include projects that would otherwise not happen.

Carbon credits are now a fixture of sustainability strategies across retail, regardless of the company’s other environmental commitments. But what are they really worth, and are they the sustainability solution they’re often promised to be?

his debate picked up renewed steam in January, when The Guardian reported that the vast majority of carbon credits approved by Verra, the largest certifier of such credits globally, are “worthless” because they lack evidence to show they reduced or prevented deforestation — the justification for approving the credit — and overstate the threat facing the forests in question.

Gucci, the only fashion brand mentioned as a buyer of Verra carbon credits in The Guardian piece, declined to comment for this story, although it has been clear that it tries to follow the mitigation hierarchy, which instructs businesses to avoid emissions and other environmental harm first and foremost, then focus on reducing, restoring and then offsetting or compensating as a last step. The Italian fashion house deferred instead to Verra’s detailed public response, which strongly refutes The Guardian’s claims, saying they’re based on studies that lack geographic context and reach incorrect conclusions because of how they were designed from the start. The organisation also described efforts it’s implementing to improve how it develops the baselines for measuring the effectiveness of climate actions.

The Guardian’s findings were produced using its own methodology and were not peer-reviewed, prompting many criticisms of the report as flawed. Regardless, the carbon market is already controversial. Companies that buy carbon credits, which represent the removal of 1 tonne of carbon dioxide from the atmosphere, often say they are “offsetting” their emissions and are therefore carbon neutral, even if their own emissions are increasing. However, that doesn’t add up to a 1.5°C pathway, and some critics say that carbon offsetting does more harm than good by allowing companies to exaggerate or falsify their climate progress.

As more fashion brands lay out net-zero targets and turn to the carbon market to help meet them, the stakes involved in whether carbon credits are a legitimate or worthless component of a climate strategy could not be higher.

ashion, like other sectors, can’t align with the goals of the Paris Agreement without reducing its own emissions. But even while a company works to shrink its carbon footprint, the pressures facing the world’s remaining forests, and the people living in or near them, do not just disappear. The premise of carbon credits ultimately boils down to one shared consensus: the industry needs to funnel money into protecting, conserving and restoring forests and ecosystems, many of which are vulnerable because of short-term economic opportunities linked to their destruction.

“We can’t solve climate change, let alone protect biodiversity, without protecting forests. And there’s just no way we’re going to be able to do that without a lot of money,” says Timothy Searchinger, senior research scholar at Princeton University’s Center for Policy Research on Energy and the Environment. But this is a big ask when people are already living in poverty, often made worse by a cost-of-living crisis. “No one’s going to say, ‘I care more about climate change than putting food in my mouth.’”

There are many questions around how companies finance the carbon market. How do they choose which projects to support, and what claims should they be able to make? Why are they allowed to buy carbon credits if they’re not doing much, or anything at all, to reduce their own emissions — and why are they voluntary? Finally, are carbon credits an effective means for generating the necessary funding and allocating it appropriately? Some say they’re not, while others argue the concept can work with the right safeguards.

“There are people who think [the voluntary carbon market is] just too dangerous, too much of a potential exploitation. And then there are people who think it is a market-based mechanism that is going to produce a lot of revenue in places that need it,” says Rachel Kyte, dean of The Fletcher School at Tufts University and co-chair of the Voluntary Carbon Markets Integrity Initiative (VCMI), which is developing a “claims code” to establish guidelines for how carbon credits can be used and what claims companies can make about their use. “And then there’s a lot of people in the middle, including VCMI, saying this only works if we agree on the rules around integrity: that this can only happen in the context of a company’s validated, science-based plan to get to net zero.”

Integrity in the carbon market is a global challenge, not fashion’s alone to solve. Still, it’s one the industry urgently needs to understand and learn how to navigate appropriately, not only for brands to meet their own sustainability goals, but to be prepared for increased scrutiny from regulators and consumers. The issue is evolving quickly, both as regulators clamp down on the kinds of marketing claims that companies make about their sustainability efforts and as momentum picks up to establish standards for the voluntary carbon market to abide by.

Making biodiversity conservation “somebody’s industry”

In the absence of a systemic restructuring of global economics — or until one emerges — many proponents of the carbon market say it’s one of the only and best means for channelling funds from wealthy countries, and companies, into the hands of communities in the Global South, who are being called on by the world to conserve their ecosystems without recognition that it’s often a matter of basic survival, let alone consideration of what proper compensation might look like.

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