Skip to Content

Problematic Offsets and REDD

Project after project, carbon offsets are proven to be failing for the climate and for communities. The latest problem projects will be added here.

Related news

Cambodia's REDD project: doomed from the start

The NGOs Community Forestry International and Pact have been working on a project to protect forests in Oddar Meanchey, Cambodia. They wanted to fund the project through the sale of forest carbon credits. But the prospects of finding buyers for their carbon are not promising. Terra Global Capital, employed to find buyers for the Cambodian carbon, have just missed a US$1,000,000 deal that would have been their first major sale.

FERN's comment:

As the Munden Project predicted in their publication 'REDD and Forest Carbon: Market based critique and recommendations', the likelihood of forest carbon ever becoming a viable source of funding for forest protection forests is very slim, due to inherent problems with forest carbon as a commodity: they are poorly designed assets and entail unsolvable clearing problems. But the problem with REDD projects goes beyond a lack of financing.


Experience on the ground shows that REDD projects rarely address the root causes of deforestation. As the article by The Cambodia Daily explains, there are serious problems to do with illegal logging in the area, and a clear lack of willingness by the government to address this, handing out concessions to sugar cane and rubber growers, two of the main commodities driving deforestation in Cambodia. There is also evidence of a militarisation of the area which is also putting the forests and local communties in jeopardy. These are things that REDD is simply not equipped to deal with, since it does not require a process of improving governance or empowering civil society, both key requirements to really address deforestation and illegal logging. Rudi Kohnert, Forest Governance campaigner in South East Asia notes that: "Far more work needs to be done in Cambodia to strengthen civil society and forest governance before there can be any hope to save its forests."


Cambodia has expressed interest in entering into negociations with the EU to sign a Forest Law Enforcement, Governance and Trade Voluntary Partnership Agreement (FLEGT VPA). VPAs are legally binding bilateral trade agreements between the EU and timber exporting countries to tackle illegal logging. FERN believes there are important lessons that any efforts to tackle deforestation should learn from FLEGT VPAs, as outlined in their publication 'Lessons learned from FLEGT for REDD'. FERN believes that FLEGT VPAs, that include as part of their process the requirement to hold multistakeholder negociations that must include civil society, are a surer basis on which to tackle deforestation and illegal logging. FERN is also looking at the impact of EU consumption of key energy and food commodities on driving deforestation. The EU's consumption habits drive over 10% of all deforestation, and FERN is drafting an Action Plan for the EU to tackle this as part of a strong regulatory framework.

Human rights implications of Kyoto’s Offsetting Scheme

During an event on "Human Rights Protections in the CDM," held during the UNFCCC climate change conference in Bonn (Germany), two representatives for the Ngäbe-Buglé indigenous community and the M10 Movement from Panama explained the negative human rights impacts of the CDM-supported Barro Blanco Dam, located on the  the Tabasará River in Panama.

FERN's comment:

Panama’s civil society has raised its voice against the human rights abuses and the destructive effects of hydro-projects. They denounce the lack of free, prior and informed consent by the Ngäbe community, according to the international conventions signed by Panama, as well as the lack of consultation as required by the CDM's own rules on stakeholder consultation.

The case of Panama is not isolated. Besides the economic and scientific flaws of offset theory, offset projects are inherently characterised by high social costs. Being created to produce carbon sinks that allow industry to gain cheap carbon credits, offset projects do not take into consideration the complexities of indigenous communities life and culture, leading to human rights abuses. This is not restricted to the case of the Barro Blanco damn in Panama, but is a widespread phenomenon. Other interesting examples are carbon sink plantations in Uganda that have caused the eviction of local people and photovoltaic projects in rural Sri Lanka that augmented poverty and indebtedness in the country, as well as many other projects that led to unsustainable development and harmed local communities. For more information on this topic and on specific case studies, read the book “Upsetting the offset” by Steffen Böhm and Siddhartha Dabhi. See here the link to the free downloadable pdf of the book. 

Not only do offset projects harm local communities in the countries in which the are implemented, but also in the countries whose industries benefit from carbon credits. Offset credits allow major industrial polluters to keep emitting by funding offset projects in developing countries. As a consequence, emissions are not cut but displaced and communities that live around firms that buy credits continue to be harmed by the uncontrolled emissions, which often contain highly toxic, non-greenhouse pollutants. As Melissa Checker explains in chapter 3 of Bohm and Dabhi's book, “Carbon offset projects create equal measures of human injustice, for the communities that host them and for the communities surrounding the facilities that buy them. The path from offset credit producer to offset credit consumer is strewn with violations to both human rights and the environment.”

New report by FERN: “Carbon Discredited” explains why EU should stay clear of forest carbon offsets
FERN and Amis de la Terre have published a report on the N’hambita Forest Carbon Offset Pilot project, explaining that it has failed to deliver its climate change, financial and development objectives.

Read the full report here in English, French and Portuguese.

FERN's comment:

The report analyses in depth the N’hambita project, a forest carbon offset scheme, and shows that it has failed in all its major goals. The data, collected during a field visit in 2012, demonstrates that the project sold carbon credits to international buyers with no credible measurement of carbon stocks in the project area, that it failed to significantly benefit the community, and that it failed to monitor the environmental impact of its activities.
Whilst analysing particular flaws specific to the N’hambita project, this case study highlights problems that are inherent to all forest offsetting schemes and shows  why the EU should not commit any more money to REDD+ in its current form.

Forest carbon offsetting is prone to the same problems as all offset projects, which is that they do not lead to a reduction in GHG emissions. The net effect of a carbon offset on GHG emissions is at best zero, because what is claimed to be reduced in one place allows continuation in emission elsewhere.

For more information on the theory of carbon offsetting see chap 3, of the book "Trading Carbon".

In addition, forest carbon offsetting has particular problems that are specific to forests. They are not a valuable long-term GHG reduction measure because of inherent scientific flaws: they are based on the false assumption that fossil carbon released from permanent storage underground and biosphere carbon stored temporarily in trees are equivalent. In reality they are not. Carbon stored in timber can easily be released in the atmosphere due to the burning and death of trees, as part of the natural carbon cycle.

The N'hambita forest carbon offset project was certified by well-known certifiers such as the Rainforest Alliance and CCBA, which is supposed to vouch for the social quality of REDD projects. In reality however, this report finds a number of adverse impacts on the local community, such as the fact that women had to spend time tending to the trees that they would otherwise have spent on growing food. As the report “ REDD Plus or REDD “Light”?” by the Swedish Society for Nature Conservation demonstrates, certificates such as the CCBA cannot vouch for the ability of a project to provide meaningful value to local communities.

Halting forest loss requires direct action against the causes of deforestation. Offset projects, aimed at the production of cheap CO2 credits, can not address the complicated dynamics of forest and ecosystem conservation, nor can they protect local communities. Forest carbon projects represent yet another demand of the global north on the productive lands of the global south, endangering the rights of local communities and iterating a scheme that sees the developed world continue its careless industrial activity at the expenses of developing countries.

The growing offset credit market also gives the false impression of action on climate change, diverting attention and funds from actual emission reduction policy. So, as FERN and FOE France’s report argues, it is  essential and urgent that the EU stops funding offset schemes and relocates such funds to actual GHG emission reduction policy in Member States.

The recent decision of the European Investment Bank to fund a major offset scheme shows  that the lessons provided by this report are yet to be heeded. The EIB has agreed to contribute 25 million EUR for the Althelia Climate Fund, a public-private partnership aimed at producing carbon credits, with a focus on sustainable land use, ecosystem services and forest carbon.

In the light of mounting evidence about the failure of forest offsetting, the EIB’s decision to fund the Althelia Climate project should be understood as dangerous for global GHG reduction targets, forest conservation and human rights in developing countries. Given the fact that the European Investment Bank’s shareholders are EU Member States, funding the Althelia project represents a major misallocation of public resources, in the context of an economic climate which demands a conscious use of public money.