Carbon credits: investors could face millionaire losses due to compensation being assessed as “useless”

Carbon credits: what they are, how they work, current impasses and more

The fuel sector's carbon credit program has been constantly challenged, both due to the spike in prices in recent months and its effectiveness in achieving environmental objectives. Do you understand this problem? O Curto help you.

Amid mounting evidence that a large number of carbon credits do nothing to mitigate the global warming and may sometimes be linked to alleged concerns about human rights, there is a growing pile of carbon credits equivalent to the annual emissions of Japan – the fifth largest polluter in the world – that are unused in the unregulated voluntary market, according to market analysis.

Um new study, published in the journal Science, found that millions of forest carbon credits approved by Verra, the world's leading certifier, are largely worthless and could worsen global warming if used for offsetting.

Repeated scandals over its true impact and regulators' crackdown on claims of "carbon neutrality" have meant a drop in demand and prices for offsetting, with signs that some carbon credit traders they are writing off investments that would have been worth hundreds of millions of dollars last year.

Net Zero: understand what the expression means

The expression “Net Zero” refers to a carbon neutrality objective, in which greenhouse gas (GHG) emissions are balanced with the removal of these gases from the atmosphere. This involves drastically reducing emissions and compensating for the remainder through measures such as reforestation, carbon capture and storage, among other strategies. The term has been widely used in the context of climate change and the transition to a low-carbon economy.

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