It has not been the best of times for the carbon offset market. Beset by criticisms it is a greenwashing scheme by corporations to pollute more freely, the industry has faced lashings from activists and even a popular late-night talk show.

A recent episode of Last Week Tonight, hosted by John Oliver, bashed carbon offsets as an industry that allows companies to mislead the public about the sincerity of their carbon reduction goals by purchasing carbon credits to preserve forests that were already protected. Additionally, Oliver pointed to cases where carbon offsets displaced locals from their homes and cited a Bloomberg News report that said study after study revealed most carbon offsets available on the market “don’t reliably reduce emissions.”

Amidst this hailstorm of criticism, Jamie Keech, co-founder and executive chairman of Vancouver-based carbon credit investor Vida Carbon, said, “I think the conversation deserves a lot of nuance.”

Keech, who spoke to SustainableBiz, said capital is pouring in to the growing industry, but like any growing industry, “… it complicates things. There is a lot of opportunity, but there’s also room for bad behaviour.”

While Keech admits Oliver was correct in his comments about poor-quality carbon credits and greenwashing efforts that pass credible registries, he argued Oliver failed to look at the majority doing good work. He said the episode was a “highly cherrypicked version of the industry” and “what he’s really missing is the fact that the only way to get net-zero is with carbon credits.”

Making better carbon credits

Keech first responded to the greenwashing allegations.

He noted there are “quality projects that create quality carbon credits that do what they say they’re gonna do, which is either reducing carbon emissions, or remov(ing) carbon from the atmosphere,” but it is the responsibility of carbon credit customers to vote with their wallet by putting money into quality projects.

To ensure this, Keech said customers should buy carbon credits verified by an established registry like Verra or Gold Standard. He said Vida only invests in carbon credit projects verified by the likes of Verra and Gold Standard, and not newfound registries.

A good carbon credit, Keech said, should remove or reduce greenhouse gases, but also have permanence (remove greenhouse gases for a significant period), additionality (the economic incentive to catalyze the change) and minimize leakage (prevent loopholes). He also said they should have a co-benefit and not just impact the climate, but the communities and countries in which they are placed.

Keech advocates for more data to refine the carbon credit industry.

He gave the example of satellites and light detection and ranging (Lidar) technology to track reforestation or deforestation. Keech also said the industry needs to better communicate how it works, as “the average person has probably never heard of a carbon credit and those who have don’t really know what it means or what it entails.”

What else are carbon credits good for?

An often-missed benefit of carbon credits, according to Keech, is their capacity to bring accurate pricing to the carbon industry. Society does not have an accurate price of carbon, he said, while carbon credits are a “valuable tool” to let the free market determine a price on the cost on removing carbon.

“There’s no way we can really accurately switch to green technologies, switch to renewable energies, make true, organic reductions if we don’t understand the cost of that; that’s the big role of carbon credits in near to medium term in my view," he said.

In the long-term, carbon credits "are part of the answer but not the only answer. There needs to be real reduction in emissions.”

Keech gave the example of the cement industry, which emits eight per cent of global emissions. With decarbonization efforts being particularly difficult for the cement industry, he said offsets are the main way of reducing its greenhouse gas emissions.

At the upcoming COP27 climate summit in November, Keech would like to see a recognition of the value of carbon credits as an important and necessary tool to look at pricing. Those would include a standardization and oversight of registries.

The value of carbon credits

“It’s not helpful to demonize an industry that is critical to decarbonization,” Keech said. The Intergovernmental Panel on Climate Change has stated in its reports carbon offsets are a vital tool to keep warming below a 1.5 C ceiling by 2050.

“To say that carbon credits don’t work is really throwing out the baby with the bathwater,” said Keech. “There are so many of these projects really adding true additionality, really reducing either carbon emissions or carbon in the atmosphere, that what John Oliver was saying is negating that. People need to understand what’s actually happening in this space and not dismiss it, but continue to professionalize it and advance it and utilize where it is appropriate.”

“There is no net-zero without carbon credits, period.”