‘Independent’ auditors overvalue credits of carbon projects, study finds

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🗞️ Driving the news: A University of Pennsylvania study has revealed systemic flaws in the auditing of voluntary carbon credit projects, focusing on 95 cases registered under Verra, the world’s largest carbon credit registry
• Researchers found that two-thirds of Verra-accredited auditors failed to detect major overstatements of credits, raising concerns about conflicts of interest and the structural integrity of the system

🔭 The context: Carbon credit projects depend on validation and verification bodies (VVBs) — such as SGS, DNV, and Bureau Veritas — to certify emissions reductions
• These auditors are paid by project developers, creating a potential conflict of interest, as both auditors and registries profit when more credits are issued
• Past investigations have already raised alarms over inflated claims in forest conservation (REDD+) and other offset projects, with several high-profile suspensions by Verra in 2024

🌍 Why it matters for the planet: If carbon credits do not represent real emissions reductions, global mitigation targets risk being undermined while companies continue polluting under a “greenwashed” neutrality
• The credibility of the voluntary carbon market — already facing widespread skepticism — hinges on independent verification
• Without structural reform, offsets may provide false assurances to corporate buyers and delay meaningful decarbonization

⏭️ What's next: Experts propose reforms including random assignment of independent auditors, centralized funding mechanisms to eliminate client bias, and stronger penalties for overclaimed credits
• Verra has resisted some recommendations, citing cost and logistical barriers
• Upcoming regulatory and standards-setting processes will determine whether voluntary markets adopt stronger governance or continue to rely on flawed self-policing

💬 One quote: “The voluntary carbon market is broken. Even if you fix the audits, you still often have flawed methodologies,” said Benedict S. Probst, Max Planck Institute.

📈 One stat: A 2024 study estimated that 84% of carbon credits issued to date failed to reflect real emission reductions, representing nearly 1 billion tons of CO₂.

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