Verra has started a review of the Kariba REDD project in Zimbabwe. The project is “on hold”

About time too

On 16 October 2023, The New Yorker published a major piece of investigative journalism into the Kariba REDD project and carbon broker South Pole’s role in selling fake carbon credits.

On the same day, Follow the Money published an article looking at trophy hunting inside the Kariba REDD project area. The article ended with a response from carbon standards setting organisation, Verra. “It is unlikely that projects engaging in trophy hunting activities would meet the rules and requirements of Verra’s programs,” the response stated.

If these new allegations are deemed credible, options Verra might consider include opening a Section 6 review which will suspend further issuance.

On 17 October 2023, Verra announced that it was suspending the Kariba REDD project pending an investigation:

[W]e are initiating an investigation of the Kariba project pursuant to the rules of the Verified Carbon Standard (VCS) Program and the Climate, Community & Biodiversity Standards (CCBS) Program. The rules and requirements of these programs provide a path to corrective action when Verra has concerns about a project’s integrity and how a project impacts the integrity of Verra’s programs. The project, and any further credit issuances, will remain on hold until Verra completes the investigation. 

“New information”

In its response to Follow the Money Verra wrote that the information in the article about trophy hunting is “new information to Verra that we need to analyze”.

And in its statement responding to The New Yorker article, Verra wrote, “we are deeply disturbed by the allegations in this piece. Many of the details reported in this article are new to Verra and were only learned upon publication of the article”.

In the statement, Verra says nothing about why Verra didn’t know about the trophy hunting, or “many of the details” unearthed in the The New Yorker article.

Hopefully, in its investigation of the Kariba project, Verra will look closely into why the validation/verification bodies - the firms that carry out the audits of Verra’s projects - did not raise the alarm many years ago about the serious problems with the project.

Is more regulation what’s needed?

Verra states that it is “a mission-driven nonprofit that does not profit from transactions in the VCM [voluntary carbon market]”. True, Verra is a nonprofit. But Verra raises most of its funding from a commission on carbon credits. The more carbon credits, the more money Verra has. This is a clear conflict of interest.

An article today in the Financial Times argues that what is needed to generate trust in carbon markets is “a robust legal and regulatory infrastructure, complete with a well-resourced oversight body”.

This entity should have the authority and capability to investigate and prosecute deceptive practices (yup, it would be very busy), thereby ensuring that carbon credit suppliers are held to account.

The US is slowly edging towards some sort of government regulation of carbon markets. In June 2023, the Commodity Futures Trading Commission put out a call for whistleblowers to report fraud or manipulation in the carbon markets.

In its statement, Verra reveals how far away it is from this sort of oversight body, when it makes the following statement:

Verra believes that the vast majority of actors in the carbon markets are people and organizations of integrity committed to climate action and sustainable development.

Given the number of scandals in the carbon markets, we could perhaps hope for a slightly more critical perspective from the world’s biggest carbon standards organisation. But Verra has been papering over the cracks in the carbon market ever since it was founded in 2005.

The Financial Times notes that, “without stringent regulation the carbon offset market falls perilously short of being credible”. And it points out that,

the absence of stringent oversight fosters an environment of mistrust and scepticism for potential buyers of carbon offset. Unable to identify fact from fiction, buyers become hesitant to enter the market at all.

Regulation as corruption

But the reality is that carbon markets cannot be regulated. Back in 2009, Larry Lohmann, of the UK-based solidarity organisation, The Corner House, wrote that,

When a particular commodity market cannot be regulated, the attempt to regulate it can do no more than create an illusion of regulatability. Deflected into a cul de sac, official action to correct abuses sustains the underlying problems, or makes them worse. Regulatory acts become a danger to society. Governance becomes a part of corruption. All this happens regardless of the good intentions of regulators or anticorruption fighters.

Lohmann added that,

Accordingly, what are conventionally classed as scams or frauds are an inevitable feature of carbon offset markets, not something that could be eliminated by regulation targeting the specific businesses or state agencies involved. Because the underlying problem is not, essentially, a matter of poor implementation or individual malefactors, it can only be eliminated by eliminating the offset market itself.

Here’s a suggestion for the Financial Times and anyone else who might be reading this. How about abolishing carbon markets and encouraging governments to set up “a robust legal and regulatory infrastructure” of the fossil fuel industry? It is, after all, fossil fuels that caused the climate crisis.

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