Caution Required: Protecting Communities from Carbon Markets

A new report from ActionAid USA highlights the stark truth behind the global carbon market industry: it’s not working. 

The report, ‘Caution Required: Protecting Communities from Carbon Markets,’ exposes how carbon offset schemes routinely fail to reduce emissions while enabling corporate greenwashing, land grabs, and human rights abuses in the Global South. Recognising that many global south countries and communities are not interested in carbon projects because they think they work as a form of climate action, but because present as a possible source of badly needed revenue.  Developed in consultation with partners in ActionAid Liberia and ActionAid Kenya, the report seeks to set out key considerations for governments and communities considering selling carbon credits through some kind of market mechanism.  

Drawing on case studies from Kenya and Liberia, the report documents a record of failed carbon credit projects as well as an infliction of violence and livelihood loss in communities in the Global South. Kenya and Liberia are in different places of engagement, as Kenya has a long history of carbon credit projects while Liberia is on the cusp of possibly major growth with companies like Blue Carbon showing considerable interest. 

 

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Key Findings: 

  • Carbon markets don’t reduce emissions: Up to 90% of rainforest offset credits sold by Verra, a leading carbon registry, were “phantom credits”—worthless in terms of actual climate benefit. 
  • The math doesn’t add up: Most offset projects fail to deliver even 25% of their promised emissions reductions. 
  • Communities are being harmed: Over 100 documented cases in five years show carbon market projects linked to violence, displacement, and rights violations—especially impacting Indigenous peoples. 
  • Big profits, small returns for communities: In Kenya, only 2% of total project revenue reaches community conservancies, while middlemen, certifiers, and foreign companies pocket the rest. 
  • The accountability gap is growing: Host communities may end up liable for failed offsets—without ever consenting to the risks in the first place. 

ActionAid is calling for: 

ActionAid is calling for:

  • An end to offsets as a climate strategy
  • Governments to ensure land rights and land tenure are protected and not given away as part of a carbon market project. Carbon markets are not climate finance and do not in any way lessen the climate finance obligations of rich countries
  • Legal safeguards to ensure communities are not left holding the bag for failed credits.

 

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