Gabriel Labbate’s carbon market fallacies
The Global Team Leader of the UN-REDD programme at UNEP is promoting a false solution to the climate crisis.
Gabriel Labbate is the head of the Climate Mitigation Unit and Global Team Leader of the UN-REDD Programme at the UN Environment Programme. He’s worked at UNEP for 20 years. He is a co-chair of the Expert Panel to the Integrity Council for Voluntary Carbon Markets. He represents UNEP at the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
On 13 November 2024, Reuters published an article written by Labbate. The article includes several fallacies. Let’s look at each in turn.
Fallacy number 1: “High-integrity carbon markets are essential for scaling forest protection and restoration.”
This fallacy is based on two assumptions, neither of which stand up to scrutiny. First, Labbate assumes that the only way to protect and restore forests is by throwing money at them. Second, he assumes that carbon markets are the only way of raising enough money to protect and restore forests.
In 2009, Jeffrey Hatcher, who at the time worked for the Rights and Resources Initiative, wrote a paper titled “Securing Tenure Rights and Reducing Emissions from Deforestation and Degradation (REDD): Costs and Lessons Learned”. The paper was published by the World Bank.
Hatcher wrote that “insecure forest tenure is a key factor in deforestation and forest degradation in many of the world’s forests” and that a large percentage of the world’s forests “are under contested ownership claims”.
Hatcher analysed the costs of recognising tenure and the projected costs of REDD globally. He concluded that,
The cost range of recognizing community tenure rights ($0.05/ha to $9.96/ha) is several times lower than the yearly costs estimates for administering, implementing and financing an international REDD scheme ($400/ha/year to $20,000/ha/year). Therefore it can be argued that a relatively insignificant investment in recognizing tenure rights has the potential to significantly improve the world’s carbon sequestration and management capacity.
Unfortunately, Hatcher’s findings have been largely ignored.
Hatcher is now managing director at Indufor North America, a management consulting firm. In 2021, he was lead author of a report for Rainforest Foundation Norway that looked at how much climate financing went to Indigenous Peoples and local communities.
The report found that, between 2011 and 2020, projects supporting Indigenous Peoples’ and local communities’ tenure and forest management received less than 1% of international climate financing. Only about 17% of this went to projects that included the name of an Indigenous Peoples’ or local communities’ organisation in the project description.
To make matters worse, far too often REDD projects have failed to address land rights and REDD has led to land grabbing on a huge scale. REDD has also failed to address the root causes of deforestation and forest degradation.
Fallacy number 2: “Article 6 provides the framework to guarantee transparency, prevent double counting and uphold environmental integrity.”
Labbate follows this claim by acknowledging that the Article 6.4 text approved on the first day of COP29 is not actually finished: “However, there is further work to do to ensure that high-quality forest carbon credits play a role in facilitating global collaboration and climate action.”
“Further work to do” is a gross understatement. At best, “high-quality forest carbon credits” could theoretically cancel out emissions from burning fossil fuels, at least temporarily. The fact that the vast majority of forest carbon credits are not “high-quality” means that trading the carbon stored in forests against continued burning of fossil fuels is making the climate crisis worse.
Simon Evans of Carbon Brief notes that three new Article 6 drafts were released on 14 November 2024. That’s 51 pages in total, with 499 bracketed passages of text and 130 “options”.
Carbon Pulse writes that talks on UN carbon markets at COP29 “are heading back into deep water . . . with reports of old conflicts that caused negotiations to collapse last year bubbling back up to the surface”.
And, as Labbate must be aware, the Article 6.4 Supervisory Body went outside its mandate when it wrote standards for carbon removal and methodologies for creating carbon credits under Article 6.4.
A member of the Supervisory Body, Olga Gassan-Zade, admits that the standards were created “on the fly” and that many people would find some of the text “puzzling”.
As Lise Masson of Friends of the Earth points out, the approval of carbon markets at COP29 is “opening the floodgates for a global carbon market that will have devastating impacts on communities in the Global South, on Indigenous peoples, and on small peasant farmers first and foremost”.
And in a recent interview with REDD-Monitor, Tamra Gilbertson, coordinator of the climate justice programme for the Indigenous Environmental Network, explains that,
“Article 6.4 is an open, free-for-all carbon offset mechanism. . . . [T]he voluntary markets that have been so fraudulent and so fraught with lies, violations against the Rights of Indigenous Peoples, and land grabs, and on and on, will also be able to register their projects in Article 6.4.”
When I asked Gilbertson what she thought the chances of getting real, verifiable, and additional carbon credits (Internationally Transferred Mitigation Outcomes as they called under the Paris Agreement) or high integrity carbon markets under Article 6, she replied,
“I think the chances are zero, because we know that carbon trading is fundamentally flawed. The thing with ITMOs is that these are to be traded, so it is about creating units and value again.”
Labbate writes that, “The participation of Indigenous peoples and local communities in every step of conservation projects will ensure they are fair and effective.” Obviously, he doesn’t mention that many Indigenous Peoples are opposed to carbon markets.
Ghazali Ohorella, the lead Indigenous Peoples Caucus negotiator for Article 6, said recently in a workshop that,
“By promoting carbon markets as a way to ‘save the planet,’ developed countries are sidelining public finance in favor of private investments, framing it as innovation while limiting their own obligations. This lets them off the hook for providing predictable, equitable funding, leaving Indigenous Peoples and the Global South to shoulder the burden of unstable market-driven solutions.”
On 10 November 2024, the International Indigenous Peoples’ Forum on Climate Change put out a statement opposing the approval of Article 6.4 standards based on the standards developed by the Supervisory Body:
Fallacy number 3: “Endless debates around the quality of forest carbon credits must end.”
Debates about the “quality of forest carbon credits” will inevitably continue. The problems with REDD credits are systemic. The fundamental difficulties of addressing leakage, additionality, permanence, and measurement have not gone away.
In January 2023, The Guardian, Die Zeit, and SourceMaterial published articles that found that more than 90% of Verra’s rainforest carbon offsets were worthless.
They were “a heap of junk”, Die Zeit journalists Tin Fischer und Hannah Knuth wrote.
Not long afterwards, the head of Verra, David Antonioli, resigned.
Renat Heuberger, the CEO of Swiss carbon consulting firm South Pole also resigned following an article by Heidi Blake in The New Yorker about the Kariba REDD project in Zimbabwe. The project was South Pole’s largest generator of carbon credits, but that was based on a huge overestimate of the rate of deforestation in the absence of the REDD project.
Fallacy number 4: Carbon markets “could drive up to 30% of global mitigation by 2030”.
This is a variation of the Big Lie pushed by promoters of “Natural Climate Solutions”. The Natural Climate Solutions Alliance, to give just one example, claims that natural climate solutions “can provide around 30% of the emissions reductions needed to limit global warming to 1.5°C by 2030”.
The Natural Climate Solutions Alliance is convened by the World Business Council for Sustainable Development and the World Economic Forum. Its members include Big Polluters such as Amazon, Apple, Aditya Birla Group, ArcelorMittal, Bayer, BP, BMW Group, Cargill, Charoen Pokphand Group, Chevron, Drax Group, E.ON, EDF Group, Eni, Equinor, Google, Holcim, McDonald’s, Meta, Microsoft, Petronas, Shell, and TotalEnergies.
Several pulp and paper companies are also members, including APRIL, Asia Pulp and Paper, Mondi, Sappi, Suzano, and Weyerhaeuser. These companies are presumably hoping to sell carbon credits from their monocultures of industrial tree plantations.
Labbate doesn’t give a source for his “30%” claim, but it originally comes from a 2017 paper titled “Natural Climate Solutions”. More than one-third of the paper’s 32 authors were from The Nature Conservancy, the world’s richest conservation organisation.
The 2017 paper relies on a series of assumptions and claims based on pseudoscience and magical thinking. Almost three-quarters of the hoped for reduction in emissions from natural climate solutions come from reforestation reduced deforestation, and changes in forest management. This would require planting trees on an area of 678 million hectares — the size of Australia. The authors also hope for a global change in diet from meat to plant-based, to allow “all grazing land in forested ecoregions” to be reforested.
As Labbate acknowledges, “Unprecedented forest fires are ravaging landscapes globally and drought-stricken parts of the Amazon face severe consequences.” In 2023, the world’s forests stopped acting as a carbon sink. Drought in the Amazon rainforest and record wildfires in Canada contributed to forests and other land ecosystems emitting almost as much carbon dioxide as they removed from the atmosphere.
To protect forests from wildfires, we need to address the climate crisis. Addressing the climate crisis means massively reducing greenhouse gas emissions from burning fossil fuels. Carbon markets allow Big Polluters to continue wrecking the climate.
Labbate’s article makes no mention of fossil fuels.
Fallacy number 5: “We now have high-integrity forest carbon methodologies.”
The day after the Reuters article was published, the article was edited. An archived copy of the article reveals that among other changes, the sentence highlighted below was deleted:
For example, the Integrity Council for the Voluntary Carbon Market has recently endorsed crediting methodologies such as Verra’s VM0048 and the Architecture for REDD+ Transaction’s (ART) TREES standard, confirming that these are credible and ready to deliver real emissions reductions.
Maybe, just maybe, Labbate was worried about giving specific examples of “high-integrity,” “credible” methodologies, in anticipation of future scandals involving these methodologies.
He’s wise to be cautious.
Verra’s carbon certification system is riddled with conflicts of interest. Auditors are paid by the developers of carbon projects, meaning that it is in the auditors’ interest to rubber stamp projects rather than painstakingly checking the project operations and running the risk that the project developer hires one of their competitors.
Meanwhile, Verra’s main source of income is a US$0.20 commission it charges on every carbon credit it certifies. From 1 December 2024, Verra will increase this to US$0.23, along with an increase in its other fees. The more carbon credits certified, the more money Verra makes.
The ART TREES standard has run into controversy over its certification of carbon credits in Guyana, which amounts to little more than greenwashing of the approximately 11 billion barrels of oil being extracted by Exxon, Hess, and CNOOC off the coast of the country.
In July 2023, Rainforest Foundation UK published a critique of four carbon certification schemes, including ART TREES. The report states that,
[F]rom the outset, some Indigenous leaders have questioned this, saying they’ve been unable to engage with the process, warning that monitoring and verification mechanism could simply ignore the ‘hard realities’ of their struggles to obtain security for their territories.
A 2023 paper published in Science magazine highlights the “deep uncertainty in the forest carbon industry”. The paper states that,
“[M]ounting scientific evidence implies that many forest landscapes are subject to “deep uncertainty”, such that claims of high accuracy in assessing carbon change are likely to remain inherently contestable, regardless of the technology or methodology deployed.”
Unai Pascual, a research professor at the Basque Centre for Climate Change is one of the co-authors of the paper. Pascual told the Stockholm Resilience Centre that,
“Many forest landscapes are subject to deep uncertainty. It’s a world of unknown unknowns. Not only do you not know the state of key parameters – you don’t even know what the key parameters for successful carbon offsets are.
“Moving away from the idea that commodifying carbon is a panacea to address climate change is urgently needed, especially so in order to address the social injustices that the carbon industry forges around the world, particularly in the Global South.”
A study published in Nature Communications the day after Labbate’s Reuters’ article found that the climate impact of carbon projects is massively overestimated. The meta-study covered 2,346 projects and found that less than 16% of carbon credits issued represented actual emissions reductions. For avoided deforestation projects, the figure was 24.7%.
In a statement, Dr. Benedict Probst, Head of the Net Zero Lab at the Max Planck Institute for Innovation and Competition, the lead author of the paper, comments that,
“There is an urgent need to establish better rules for issuing carbon credits. All project types face systemic quality issues, and the quantification of emission reductions needs substantial improvement.”
Clearly, Labbate’s optimism about “high-integrity forest carbon methodologies” is misplaced. But even better than establishing “better rules” for carbon projects would be to scrap carbon trading altogether.
Labbate acknowledges that “markets alone won’t solve the problem”. Indeed. But it’s worse than that. Carbon markets make the problem worse by distracting from the urgent need to leave fossil fuels in the ground.
I agree….The last thing we need is any more controls from the UN.. they should be pushed away .. They have caused almost all the wars, economic stress, and now wealth transfer, to fund the so called climate emergency machine.. This and other initiatives must be stopped. The west must lead as the rest will want to continue to participate to get their hands in our pockets.
There are multiple errors underlying carbon marketing. One is the desire to throw money at a problem, feeling there, done with that, and wishfully thinking that there will be a good outcome. Another serious issue is attempting to translate parts of Nature into market-tradable assets. The only type of asset tradable in financial markets is debt obligations. So when some aspect of Nature is equated with debt, one needs to follow the money. Who got the money, who got the debt, and who gets screwed when (not if) there is default. Another problem is how governments misunderstand how financial markets work - all they see is massive flows of money, and if only they could find a way to siphon off some of that market money (which is usually VERY environmentally destructive) into “saving” Nature. This was also the hope of COP16 in Colombia. Although the authority and influence of finance is considerable, that power resides in the realm of the capitalist/colonial ideology which legitimates theft as its operational principle - all the world is presumed to lie there waiting to be exploited. Thus, any consideration for Indigenous Rights and local land tenure more than weasel-words is a fantasy.