More Than Half of Carbon Credit Auditors Have Signed Off on 'Overclaimed' Benefits

Can carbon-reducing projects "offset" a company's emissions? "The reality has been less encouraging," according to a Science magazine editorial by Cary Coglianese, a law/political science professor at University of Pennsylvania, and Cynthia Giles, a former senior advisor at the U.S. Environmental Protection Agency. In a new paper published Wednesday, they found that more than half of all currently-certified carbon auditors signed off on projects later found to be "overclaiming" carbon benefits.
Their conclusion? "Criticism should be directed not at individual auditors as much as the structure of the system that fosters these outcomes."

Most carbon offset projects that have been closely scrutinized — including projects for forest protection, renewable energy, and methane-reducing methods of rice cultivation — have greatly exaggerated their climate benefits. More than 80% of issued credits might not reflect real emission reductions. This has alarmed potential offset purchasers and stalled carbon offset markets.

Efforts to resuscitate the beleaguered offset market tout third-party auditing as "essential" to ensuring credit integrity. That reliance is misplaced... [E]xtensive research from many contexts shows that auditors selected and paid by audited organizations often produce results skewed toward those entities' interests. A field experiment in India, for example, found that air and water pollution auditors who were randomly assigned and paid from a central fund reported emissions at levels 50 to 70% higher than auditors selected and paid by audited firms. Auditors — like all people — are subject to a well-established and largely unconscious cognitive phenomenon of self-serving bias, causing them to interpret evidence in favor of their clients...

[A]uditors have been required all along and have failed to prevent substantial credit overclaiming. It is rarely acknowledged that all of the credit overclaiming projects that have stirred so much controversy were ratified by third-party auditors under the same auditor selection and payment system that offset advocates rely on today... Auditors are unlikely to stay in business if they disapprove credits at the high rates that research suggests would be appropriate today...

Given the high planetary stakes in carbon policy choices being made now, it is past time to recognize that third-party auditors selected and paid by the audited organizations are not the bulwark for credit integrity they are claimed to be.

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