Do Carbon Offsets Actually Work? 'Planet Money' Takes A Look

MARY LOUISE KELLY, HOST:

One-fifth of the world's biggest companies have made some sort of pledge to go carbon neutral, meaning they will pollute less or pay to offset their pollution. One popular type of offset involves saving trees. But as Julia Simon reports for our Planet Money podcast, some critics are finding the tree math doesn't add up.

JULIA SIMON, BYLINE: With so many companies now looking to buy offsets, there is a booming industry of startups looking to sell them, including one called Pachama, which sells offsets from forests.

DIEGO SAEZ GIL: So in a way, we are a marketplace like Airbnb, connecting supply and demand.

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SIMON: This is co-founder Diego Saez Gil. On Pachama's website, companies can go to a map and pick a forest to save in Columbia, Peru or this map we're zooming into in Brazil.

Oh, there it goes.

SAEZ GIL: It zooms.

SIMON: Zooming into Brazil.

SAEZ GIL: Yeah.

SIMON: Oh, in the center of Brazil. Woo (ph).

SAEZ GIL: Yeah.

SIMON: Big, big zoom.

SAEZ GIL: Yeah, yeah. And you can see the shape of a triangle.

SIMON: It's a triangle.

SAEZ GIL: Yes. That is the borders of the area that is being conserved. Otherwise it will be deforested.

SIMON: That otherwise it will be deforested is key here because there is a theory behind offsets that save trees. Trees - kind of incredible. They store carbon, suck it out of the air. Some trees get cut down every year for things like ranching or for lumber, so the company pays to stop trees from getting cut down. Then in theory, those payments prevent carbon emissions. But how is an offset buyer to know what would have happened to the trees without that payment? Maybe no loggers had plans to cut down that forest. Maybe the local government was already protecting it. Or maybe the ranchers just went down the road and cut down a different forest. All these questions are the reason why David Antonioli has a job.

DAVID ANTONIOLI: I'm the chief executive officer of Verra.

SIMON: Verra certifies many of the offsets that Saez Gil and other brokers sell - nearly 70% of all offsets sold to companies. And part of Verra's process involves answering those hypothetical questions about what would have otherwise happened.

ANTONIOLI: You say there's so many hypotheticals. I don't think there are that many, quite frankly. I mean, we know how many trees are on the ground, right? We know how many get cut down. And I think that, you know, absolutely companies can be comfortable and confident that they're reducing emissions.

SIMON: But a study in last year's proceedings of the National Academy of Sciences suggests companies can't be so confident. It looked at forest projects in the Brazilian Amazon, and the researchers concluded the projects were overestimating the deforestation that would have happened had they not been there by almost 60 times. I brought these concerns to Antonioli as Verra issued all the offsets.

Ten out of 12 Brazilian forestry projects that you gave your stamp of approval to didn't stop the deforestation they claim. That's what that study found. So for the corporations that have purchased offsets from these projects, did they offset their emissions?

ANTONIOLI: Yes, I think so. I mean, there are many great studies out there looking at the impacts of projects, and we welcome them. But we shouldn't be throwing the baby out with the bathwater just because there was one study that identified some projects that, according to one methodology, were different than what we say.

SIMON: He says Verra uses studies like this to update their certification process. In fact, earlier this month Verra updated its rules for future forest projects. But there are lots of companies still buying offsets from those projects in Brazil, and they may not be saving as many trees as they thought. For NPR News, I'm Julia Simon. Transcript provided by NPR, Copyright NPR.