Why Carbon Credits Are Mostly a Fraud
May 21, 2026 · Frisian News
A new study shows that over 90 percent of carbon credits traded on major markets never remove any carbon from the atmosphere. Companies and governments use them to claim environmental progress while emissions keep rising.
Research published recently shows that carbon credit schemes have almost no impact on climate. A large majority of carbon offset projects examined across forestry, renewable energy, and methane capture generated credits that did not represent real emissions reductions. Most projects would have happened anyway, with or without the credit payments. Companies and funds that trade these credits made billions in profit while atmospheric CO2 levels climbed higher each year.
The fraud works because carbon credit markets operate on faith, not measurement. A company in Indonesia plants trees, claims they will store carbon for decades, and sells credits to a multinational corporation in Europe. No one verifies the trees survive, grow, or actually stay in the ground ten years later. A solar farm in India gets built with or without carbon finance, yet the project generator retroactively claims credit for emissions that never existed. The accounting rules let sellers invent baseline scenarios that make even useless projects appear valuable.
Powerful interests built their wealth on this broken system. Carbon credit exchanges like Verra and Gold Standard certify projects and pocket fees while taking no responsibility for outcomes. Major investment firms and state pension funds dumped billions into carbon offset funds because regulators and public relations teams told them it looked good. Governments used carbon credit purchases to dodge actual emissions cuts at home. No politician had to tell voters why the cement factory or coal plant still operates, because somewhere in Africa or Southeast Asia, a piece of paper claimed to offset it.
Research found that only a small fraction of carbon credits actually represented measurable, permanent emissions reductions. Real climate work requires cutting fossil fuel use, switching to wind and solar, improving building efficiency, and changing agriculture. These tasks demand money, political will, and institutional change. Carbon credits offer an escape route. A company buys paper instead of redesigning its operations. A bank shows climate commitment without divesting from oil. A government keeps burning coal while importing invisible carbon savings.
Regulators now face a choice. They can tighten carbon credit standards, require independent verification, and demand proof that projects would not happen without payment. This will shrink the market and reduce profits for credit traders. Or they can let the system continue, knowing it gives the world plausible cover for inaction while emissions accelerate. The industry will lobby hard for the second option. History suggests regulators will listen.
Published May 21, 2026 · Frisian News