VERIFY: Yes, carbon credits are legitimate and some companies really do use them to offset carbon usage

Earlier this year, billionaire philanthropist Bill Gates answered questions about climate change and what people can do to decrease their carbon footprint in his ninth “Ask Me Anything” session on Reddit while promoting his new book, How to Avoid a Climate Disaster. When asked what he’s personally doing to consume less, Microsoft’s co-founder said, “I plan to fly a lot less now that the pandemic has shown we can get by with less trips.”

VERIFY viewer Chris M. tells us Gates inspired her to do a little research into what she can do to make things better for the environment. She says she wants to know if carbon credits that can be purchased are legitimate and if companies who sell them actually use them to offset carbon usage like they claim.  

THE QUESTION

Are carbon credits legitimate and do companies really use them to offset carbon usage?

THE SOURCES

• Kevin B. Jones, Director of the Institute for Energy and the Environment at Vermont Law School
• Gilles Dufrasne, Policy Officer at Carbon Market Watch

THE ANSWER

Yes, carbon credits are legitimate and some companies really do use them to offset carbon usage. But experts say the average consumer should do their own due diligence to make sure what they’re purchasing is valid.

WHAT WE FOUND

A carbon credit is a “tradable credit granted to a country, company, etc., for reducing emissions of carbon dioxide or other greenhouse gases by one metric ton below a specified quota,” according to Merriam-Webster. 

Gilles Dufrasne, a policy officer at Carbon Market Watch — an advocacy NGO based in Belgium that focuses on climate policies — and Kevin B. Jones, the director of the Institute for Energy and the Environment at Vermont Law School, explained how carbon credits are created and how they can be purchased. 

“A carbon credit is supposed to represent a ton of CO2 equivalence that will not worsen climate change so it can have been reduced or it can have been removed from the atmosphere — essentially, you're reducing emissions,” Dufrasne told VERIFY. “The idea is that by purchasing these credits, you're paying for this reduction of CO2, and so you are delivering a benefit to the climate.” 

“Carbon credits can be purchased by regular people or corporations, or can be much more formally constructed within both state, federal and international agreements,” said Jones. 

In terms of the legitimacy of purchasing carbon credits, Jones told VERIFY there are several companies that specialize in working with corporate entities to certify that carbon reductions are actually happening after the credits have been purchased. 

“At the state, federal and international level, there are regulatory bodies that pay close attention to these in terms of setting up the standards and making sure that they're verified,” said Jones.  “The big players, who are obviously very concerned about making sure that their investments don't get termed to be ‘greenwashing,’ or not meaningful, often can work with other sophisticated organizations that can help them make sure that the credits meet their needs and pass muster in terms of their validity.”  

Meanwhile, Dufrasne said for the average consumer, it can often be very difficult to assess the legitimacy of a carbon credit prior to purchasing one or more.

“As an average consumer, if you are offered the chance of buying these credits to compensate for emissions, you want to know, well, is this really delivering something good for the climate, and if this is helping reduce the impacts of climate change — and the answer to that is sometimes, and of course, it's never black and white,” said Dufrasne. 

“You have some credits that do deliver benefits and that deliver the full reduction in CO2 that they are supposed to be representing — they come from projects that really reduce emissions, and that get financed by the sale of these credits,” he continued. “A major issue, however, is when you have projects that sell credits, but don't actually need the revenue from the credits to exist.” 

Dufrasne said that companies should be transparent and provide information to consumers so they can make an informed decision before they purchase a carbon credit. 

“As an individual, often you will see a box to take on a website. For example, if you have purchased a flight, and then just before checkout you see the small box that says, ‘Oh, do you want to offset the emission from your flight?’ That's how many consumers actually purchase the offsets,” said Dufrasne. “This is actually quite problematic because often there's very little information and transparency around where the money is truly going. If you have no information about where the money is going, don't take the box, don't offset your flight.”

Nevertheless, Jones said the purchase of carbon credits, when legitimate, is an important mechanism in the fight against climate change. 

“If constructed and used correctly, they can be incredibly important in terms of making sure that we finance our efforts against climate change in the most cost-effective means,” said Jones. 

To make sure the carbon credits you are purchasing are legitimate, look for companies that have been certified by auditors or standards groups, like the American Carbon Registry, Green-e, The Gold Standard and Verra. 

More from VERIFY: Yes, extreme heat influenced by climate change is killing sea life