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More than half of the 27 million carbon credits produced by one of the world’s largest offsetting projects did not correspond to actual emission reductions, leading carbon registry Verra has said following a two-year review of Zimbabwe’s Kariba forest protection initiative.

Verra is now seeking compensation for the millions of “excess” credits from Carbon Green Investments (CGI) – the project’s developer – after the registry’s technical analysis found the threat to the forest had been overstated in the project’s original forecast.

The Kariba REDD+ project, which aims to protect an area 10 times the size of New York City, has long faced accusations by several media outlets and carbon market analysts of exaggerating its climate credentials through flawed carbon accounting and of failing to provide promised benefits to local communities.

The conservation project stretches across national parks, forest reserves and wildlife corridors along the southern shore of Lake Kariba in the Zambezi River basin in northern Zimbabwe.

Dozens of big companies, including Gucci, Volkswagen, Nestlé and Dutch electricity firm Greenchoice, bought millions of Kariba’s credits and used them to offset part of their own emissions and back up various green assertions.

Overstated deforestation risk

According to a report by Bloomberg, the project generated more than $100 million in revenue after being set up over a decade ago by South Pole, a major Swiss carbon credits broker, and CGI, which is run by a Zimbabwean businessman. South Pole walked away from Kariba in late 2023 when Verra suspended the project and began an internal review following an investigation by The New Yorker magazine.

Nearly two years later, Verra announced last week that its review had found 57% of Kariba’s nearly 27 million credits were issued “in excess”. That is because the actual deforestation observed in a reference area chosen by Kariba’s project developers to predict how much CO2 the scheme would conserve was “significantly lower” than initially estimated, Verra said.

    This calculation is known as the baseline against which a project’s performance is assessed. Critics have repeatedly questioned the accounting method and said flawed methodologies compromise the integrity of carbon offsets. Previous studies by independent rating agencies suggested Kariba may have produced as many as 30 times more credits than it should have done by exaggerating the threat to forests that were never really at risk.

    Compensation process

    Verra said last week that, despite finding them worthless, the millions of “excess” credits already used by buyers would remain valid. But, at the same time, the carbon registry has requested CGI to compensate for them by buying and cancelling an equivalent number of credits from other projects.

    Verra “received a positive response related to this process” from CGI, a spokesperson subsequently told Climate Home News, without giving further details.

    CGI’s founder, Zimbabwean tycoon Steve Wentzel, did not reply to a request for comment. In an online statement, CGI said it remains dedicated to Kariba’s “mission of forest conservation” and “committed to continue working toward resolutions that uphold the highest standards”.

    The company also said it had asked Verra for a “moratorium” on the compensation process until it reviews the registry’s carbon assessment.

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    Separately, Verra also invited the holders of nearly 5 million Kariba credits that have been purchased but not yet used for offsetting to “voluntarily” eliminate those credits, which in that case would be counted towards the compensation.

    South Pole, CGI’s former partner in the scheme, said last week it had asked Verra to cancel 2.5 million credits it still held “to help address the discrepancies in issued credits and uphold the environmental integrity of the project”.

    ‘Big concerns’ remain

    But Jonathan Crook, at the nonprofit Carbon Market Watch (CMW), said Verra’s handling of the Kariba case leaves many questions unanswered and raises big concerns.

    “It is not clear what, if anything concrete, will happen if CGI refuses this request [for compensation], thereby raising real questions over whether anyone will actually be held liable, which would be a shockingly inappropriate outcome to this scandal,” he added.

    Verra has a patchy track record in obtaining compensation from discredited projects. Nearly 2 million phantom credits linked to failed methane-cutting rice cultivation projects in China have yet to be paid back more than a year since Verra shut down the schemes and sought recompense from their developers.

      As Climate Home revealed last year, energy giant Shell was directly involved in the projects and used the majority of the credits to offset – on paper – real greenhouse gas emissions created by its vast fossil fuel operations.

      Climate Home understands that Verra is still pursuing compensation for the excess credits from the companies involved in the rice cultivation projects, but there is no fixed timeline for the process to be completed.

      Questions over permanence

      CMW’s Crook also raised concerns over the future integrity of the remaining 11.6 million Kariba credits deemed by Verra’s review to be of good quality. An underlying principle of REDD+ projects is that carbon stored in forests must be maintained over a long period of time – up to a century – to reliably offset the release of fossil carbon.

      But, with the Kariba project no longer registered with Verra, any carbon supposedly conserved through the scheme now “faces a significant risk of being re-released into the atmosphere over the coming years and decades without any clear solution to remedy the situation”, Crook added.

      More than 5 million credits from the Kariba project had been kept in a so-called buffer pool, an insurance fund with credits set aside for unexpected losses in stored carbon.

      Verra said it had decided to “take pre-emptive action” and cancel all those credits. Additionally, a monitoring system will track deforestation in the project area in the years ahead and extra credits will be cancelled if observed forest loss goes beyond Kariba’s contributions to the buffer pool, the registry said.

      “We are following our processes to ensure integrity and deliver what is right for the climate and communities,” the Verra spokesperson added.

      The post Zimbabwe forest carbon megaproject generated millions of junk credits appeared first on Climate Home News.

      Zimbabwe forest carbon megaproject generated millions of junk credits

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      Trump’s EPA Claims Strong Enforcement. But the Data Tells a Different Story.

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      The EPA released its latest enforcement and compliance report and touted the agency’s crackdown on environmental crimes under the Trump administration, yet 75 percent of the criminal cases closed last fiscal year originated before the president took office.

      For over a decade, Hino Motors Ltd. imported and sold more than 105,000 vehicles and engines with misleading or fabricated emissions data, until testing by the Environmental Protection Agency revealed the emissions-fraud scheme.

      Trump’s EPA Claims Strong Enforcement. But the Data Tells a Different Story.

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      CCC: Net-zero will protect UK from fossil-fuel price shocks

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      The “cost” of cutting UK emissions to net-zero is less than the cost of a single fossil-fuel price shock, according to a new report from the Climate Change Committee (CCC). 

      Moreover, a net-zero economy would be almost completely protected from fossil-fuel price spikes in the future, says the government’s climate advisory body.

      The report is being published amid surging oil and gas prices after the US and Israel attacked Iran, which has triggered chaos on international energy markets.

      It builds on the CCC’s earlier advice on the seventh “carbon budget”, which found that it would cost the UK less than 0.2% of GDP per year to reach its net-zero target.

      In the new report, the CCC sets out for the first time a full cost-benefit analysis of the UK’s net-zero target, including the cost of clean-energy investments, lower fossil-fuel bills, the health benefits of cleaner air and the avoided climate damages from cutting emissions.

      It finds that the country’s legally binding target to reach “net-zero emissions” by 2050 will bring benefits worth an average of £110bn per year to the UK from 2025-2050, with a total “net present value” of £1,580bn.

      The CCC states that its new report responds to requests from parliamentarians and government officials seeking to better understand its cost assumptions, amid the ongoing cost-of-living crisis in the UK.

      The report also pushes back on “misinformation” about the cost of net-zero, with CCC chair Nigel Topping saying in a statement that it is “important that decision-makers and commentators are using accurate information to inform debates”.

      Co-benefits outweigh costs

      The CCC’s new report is the first to compare the overall cost of decarbonising with the wider benefits of avoiding dangerous climate change, as well as other “co-benefits”, such as cleaner air and healthier diets.

      It sets the CCC’s previous estimate of the net cost of net-zero – some £4bn per year on average out to 2050 – against the value of avoided damages and other co-benefits.

      These “co-benefits” are estimated to provide £2bn to £8bn per year in net benefit by the middle of the century, according to the report.

      The CCC notes that this approach allowed it to “fully appraise the value of the net-zero transition”.

      It concludes that the net benefits of reaching net-zero emissions by 2050 are an average of £110bn per year from 2025 to 2050.

      These benefits to the UK amount to more than £1.5tn in total and start to outweigh costs as soon as 2029, says the CCC, as shown in the figure below.

      Costs and benefits of the CCC’s “balanced pathway” to net-zero, £bn per year (undiscounted). Purple: net cost of investments in clean-energy technologies.Yellow: operating costs and savings. Red: Co-impacts such as health benefits. Peach: avoided climate damages. Black line: Overall net cost-benefit. Source: CCC.

      In addition, the CCC says that every pound spent on net-zero will bring benefits worth 2.2-4.1 times as much.

      This updated analysis includes the value of benefits from improved air quality being 20% higher in 2050 than previously suggested by the CCC.

      However, the “most significant” benefit of the transition is the avoidance of climate damages, with an estimated value of £40-130bn in 2050. The report states:

      “Climate change is here, now. Until the world reaches net-zero CO2 [carbon dioxide] emissions, with deep reductions in other greenhouse gases, global temperatures will continue to rise. That will inevitably lead to increasingly extreme weather, including in the UK.”

      The CCC’s conclusion is in line with findings from the Office for Budget Responsibility (OBR) in 2025, which suggested that the economic damages of unmitigated climate change would be far more severe than the cost of reaching net-zero. 

      The CCC notes that its approach to the cost-benefit analysis of the net-zero target is in line with the Treasury’s “green book”, which is used to guide the valuation of policy choices across UK government. 

      It says that one of the key drivers of overall economic benefit is a more efficient energy system, with losses halved compared with today’s economy.

      It says that the UK currently loses £60bn a year through energy waste. For example, it says nearly half of the energy in gas is lost during combustion to generate electricity.

      In a net-zero energy system, such energy waste would be halved to £30bn per year, says the CCC, thanks to electrified solutions, such as electric vehicles (EVs) and heat pumps.

      For example, it notes that EVs are around four times more efficient than a typical petrol car and so require roughly a quarter of the energy to travel a given distance.

      Collectively, these efficiencies are expected to halve energy losses, saving the equivalent of around £1,000 per household, according to the CCC.

      Net-zero protects against price spikes

      The CCC tests its seventh carbon budget analysis against a range of “sensitivities” that reflect the uncertainties in modelling methodologies and assumptions for key technologies. This includes testing the impact of a fossil-fuel price spike between now and 2050.

      In the original analysis, the committee had assumed that the cost of fossil fuels would remain largely flat after 2030.

      However, the report notes that, in reality, fossil-fuel prices are “highly volatile”. It adds:

      “Fossil-fuel prices are…driven by international commodity markets that can fluctuate sharply in response to geopolitical events, supply constraints, and global demand shifts. A system that relies heavily on fossil fuels is, therefore, exposed to significant price shocks and heightened risk to energy security.”

      It draws on previous OBR modelling of the impact of a gas price spike. This suggested that future price spikes would cost the UK government between 2-3% of GDP in each year the spike occurs, assuming similar levels of support to households and businesses as was provided in 2022-23.

      The CCC adapts this approach to test a gas-price spike during the seventh carbon budget period, which runs from 2038 to 2042.

      It finds that, if a similar energy crisis occurred in 2040 and no further action had been taken to cut UK emissions, then average household energy bills would increase by 59%. In contrast, bills would only rise by 4%, if the UK was on the path to net-zero by 2050.

      The committee says that when considering the impact on households, businesses and the government, a single fossil-fuel price shock of this nature would cost the country more than the total estimated cost of reaching.

      The finding is particularly relevant in the context of rising oil and gas prices following conflict in the Middle East, which has prompted some politicians and commentators to call for the UK to slow down its efforts to cut emissions.

      In his statement, Topping said that it was “more important than ever for the UK to move away from being reliant on volatile foreign fossil fuels, to clean, domestic, less wasteful energy”.

      Angharad Hopkinson, political campaigner for Greenpeace UK, welcomed this finding, saying in a statement:

      “Each time this happens it gets harder and harder to swallow the cost. The best thing the UK can do for the climate is also the best thing for the cost of living crisis – get off the uncontrollable oil and gas rollercoaster that drags us into wars we didn’t want but still have to pay for. Inaction on climate is unaffordable.”

      Benefits remain even if key technologies are more expensive

      In addition to testing the impact of more volatile fossil-fuel prices, the CCC also tests the implications if key low-carbon technologies are cheaper – or more expensive – than thought.

      It concludes that the upfront investments in net-zero yield significant overall benefits under all of the “sensitivities” it tested. As such, it offers a rebuttal to the common narrative that net-zero will cost the UK trillions of pounds. 

      The net cost of net-zero comes out at between 0% and 0.5% of GDP between 2025 and 2050, says the CCC, under the various sensitivities it tested.

      “This sensitivity analysis shows that an electrified energy system is both a more efficient and a more secure energy system,” adds the CCC.

      Finally, the report takes into account the costs of the alternative to net-zero. It looks at what would need to be spent in an economy where net-zero was not pursued any further.

      The CCC says that the gross system cost of the balanced pathway falls below the baseline cost from 2041, which is consistent with its previous seventh carbon budget advice.

      As shown in the chart below, costs fall under a net-zero pathway between 2025 to 2050, whereas they rise in the baseline of no further action.

      Moreover, the total costs of the alternatives are broadly similar, with the relatively small difference shown by the solid line.

      Gross investment and operation costs for both the “balanced pathway” scenario and the baseline scenario
      Gross investment and operation costs for both the “balanced pathway” scenario and the baseline scenario, £bn/year, out to 2050. Source: CCC analysis.

      The decline in energy system costs shown in the figure above is broadly driven by more efficient low-carbon technologies, says the CCC, helping costs to fall from 12% of GDP today to 7% by the middle of the century.

      The CCC’s new analysis comes ahead of the UK parliament voting on and legislating for the seventh carbon budget, which it must do before 30 June 2026.

      The post CCC: Net-zero will protect UK from fossil-fuel price shocks appeared first on Carbon Brief.

      CCC: Net-zero will protect UK from fossil-fuel price shocks

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      Following Months of Drought, Floods in Kenya Kill More Than 40 People

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      Climate change and urban development are exacerbating floods in the region, experts say.

      After months of intense drought conditions, Kenya was inundated by rain late last week, triggering severe flooding that killed more than 40 people. In the country’s capital city, Nairobi, a month’s worth of rain fell in 24 hours.

      Following Months of Drought, Floods in Kenya Kill More Than 40 People

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