Revealed: more than 90% of rainforest carbon offsets by biggest provider are

The forest carbon offsets approved by the world’s leading provider and used by Disney, Shell, Gucci and other big corporations are largely worthless and could make global heating worse, according to a new investigation.

The research into Verra, the world’s leading carbon standard for the rapidly growing $2bn (£1.6bn) voluntary offsets market, has found that, based on analysis of a significant percentage of the projects, more than 90% of their rainforest offset credits – among the most commonly used by companies – are likely to be “phantom credits” and do not represent genuine carbon reductions.

The analysis raises questions over the credits bought by a number of internationally renowned companies – some of them have labelled their products “carbon neutral”, or have told their consumers they can fly, buy new clothes or eat certain foods without making the climate crisis worse.

But doubts have been raised repeatedly over whether they are really effective.

The nine-month investigation has been undertaken by the Guardian, the German weekly Die Zeit and SourceMaterial, a non-profit investigative journalism organisation. It is based on new analysis of scientific studies of Verra’s rainforest schemes.

It has also drawn on dozens of interviews and on-the-ground reporting with scientists, industry insiders and Indigenous communities. The findings – which have been strongly disputed by Verra – are likely to pose serious questions for companies that are depending on offsets as part of their net zero strategies.

Verra, which is based in Washington DC, operates a number of leading environmental standards for climate action and sustainable development, including its voluntary carbon standard (VCS) that has issued more than 1bn carbon credits. It approves three-quarters of all voluntary offsets. Its rainforest protection programme makes up 40% of the credits it approves and was launched before the Paris agreement with the aim of generating revenue for protecting ecosystems.

Verra argues that the conclusions reached by the studies are incorrect, and questions their methodology. And they point out that their work since 2009 has allowed billions of dollars to be channelled to the vital work of preserving forests.

The investigation found that:

• Only a handful of Verra’s rainforest projects showed evidence of deforestation reductions, according to two studies, with further analysis indicating that 94% of the credits had no benefit to the climate.

• The threat to forests had been overstated by about 400% on average for Verra projects, according to analysis of a 2022 University of Cambridge study.

• Gucci, Salesforce, BHP, Shell, easyJet, Leon and the band Pearl Jam were among dozens of companies and organisations that have bought rainforest offsets approved by Verra for environmental claims.

• Human rights issues are a serious concern in at least one of the offsetting projects. The Guardian visited a flagship project in Peru, and was shown videos that residents said showed their homes being cut down with chainsaws and ropes by park guards and police. They spoke of forced evictions and tensions with park authorities.

The analysis: “It’s disappointing and scary”

To assess the credits, a team of journalists analysed the findings of three scientific studies that used satellite images to check the results of a number of forest offsetting projects, known as Redd+ schemes. Although a number of studies have looked at offsets, these are the only three known to have attempted to apply rigorous scientific methods to measuring avoided deforestation.

The organisations that set up and run these projects produce their own forecasts of how much deforestation they will stop, using Verra’s rules. The predictions are assessed by a Verra-approved third party, and if accepted are then used to generate the credits that companies can buy and use to offset their own carbon emissions.

For example, if an organisation estimates its project will stop 100 hectares (247 acres) of deforestation, it can use a Verra-approved formula to convert that into 40,000 CO₂e (carbon dioxide equivalent) of saved carbon emissions in a dense tropical forest if no deforestation takes place, although the formula varies according to habitat and other factors. Those saved emissions can then be bought by a company and applied to its own carbon reduction targets.

Two different groups of scientists – one internationally based, the other from Cambridge in the UK – looked at a total of about two-thirds of 87 Verra-approved active projects. A number were left out by the researchers when they felt there was not enough information available to fairly assess them.

The two studies from the international group of researchers found just eight out of 29 Verra-approved projects where further analysis was possible showed evidence of meaningful deforestation reductions.

The journalists were able to do further analysis on those projects, comparing the estimates made by the offsetting projects with the results obtained by the scientists. The analysis indicated about 94% of the credits the projects produced should not have been approved.

Credits from 21 projects had no climate benefit, seven had between 98% and 52% fewer than claimed using Verra’s system, and one had 80% more impact, the investigation found.

Separately, the study by the University of Cambridge team of 40 Verra projects found that while a number had stopped some deforestation, the areas were extremely small. Just four projects were responsible for three-quarters of the total forest that was protected.

The journalists again analysed these results more closely and found that, in 32 projects where it was possible to compare Verra’s claims with the study finding, baseline scenarios of forest loss appeared to be overstated by about 400%. Three projects in Madagascar have achieved excellent results and have a significant impact on the figures. If those projects are not included, the average inflation is about 950%.

The studies used different methods and time periods, looked at different ranges of projects, and the researchers said no modelling approach is ever perfect, acknowledging limitations in each study. However, the data showed broad agreement on the lack of effectiveness of the projects compared with the Verra-approved predictions.

Two of the studies have passed the peer review process and another has been released as a preprint.

However, Verra strongly disputed the studies’ conclusions about its rainforest projects and said the methods the scientists used cannot capture the true impact on the ground, which explains the difference between the credits it approves and the emission reductions estimated by scientists.

The carbon standard said its projects faced unique local threats that a standardised approach cannot measure, and it works with leading experts to continuously update its methodologies and make sure they reflect scientific consensus. It has shortened the time period in which projects must update the threats they face to better capture unforeseen drivers, such as the election of Jair Bolsonaro in Brazil. Verra said it already used some of the methods deployed by the researchers in its own standards, but does not believe they are appropriate for this project type.

Verra was specifically concerned with the use of “synthetic controls”, where the international group picked comparable areas and used them as a basis for deforestation measurements. Verra felt this was problematic because the controls might not reflect pre-project conditions, and also would compare the project with a hypothetical scenario rather than a “real area, as Verra does”. But the study authors argue that this mischaracterises their work: the comparison areas used in both cases are real areas, with deforestation levels based on rates that are local to the projects. The Cambridge group does not use synthetic controls.

“I have worked as an auditor on these projects in the Brazilian Amazon and when I started this analysis, I wanted to know if we could trust their predictions about deforestation. The evidence from the analysis – not just the synthetic controls – suggests we cannot. I want this system to work to protect rainforests. For that to happen, we need to acknowledge the scale of problems with the current system,” said Thales West, a lead author on the studies by the international group.

Erin Sills, a co-author in the international group and a professor at North Carolina State University, said the findings were “disappointing and scary”. She was one of several researchers who said urgent changes were needed to finance rainforest conservation.

“I’d like to find that conserving forests, which conserves biodiversity, and conserves local ecosystem services, also has a real effective impact on reducing climate change. If it doesn’t, it’s scary, because it’s a little bit less hope for reducing climate change.”

‪David Coomes‬, a professor of forest ecology at the University of Cambridge who was a senior author on a study looking at avoided deforestation in the first five years of 40 Verra schemes, was part of the Cambridge group of researchers. He reviewed the Guardian’s findings and said there was a big gap between the amount of deforestation his team estimated the projects were avoiding and what the carbon standard was approving.

“It’s safe to say…