Europe Resorts to the Carbon Indulgences Scam Again

Politico reported last week that the European Commission wants to keep the 90% emissions-cutting 2040 target by changing how countries calculate their progress. The EU – reeling from the backlash to its costly green policies – is proposing purchasing international carbon credits to meet its 2040 target of cutting its carbon emissions by 90%. The Telegraph reported that the UK Government plans to rejoin the EU’s Emissions Trading Scheme carbon market that it left when Brexit took effect at the end of 2020.

A green-obsessed Europe and UK, busy deindustrialising with self-inflicted high energy prices, are faced with new challenges. They are intent on carrying on the Ukraine proxy war against Russia “to the last Ukrainian” in contrast with President Trump’s refusal to fund the protracted conflict and his efforts to negotiate peace. Germany is seeking to fund its defence requirements by exempting defence spending from constitutional fiscal constraints now that the trans-Atlantic alliance is fraying.

On the economic front, the EU faces the prospect of having its own high tariff and other trade barriers being reciprocated by the Trumpian counter-revolution. All this is occurring when home-grown populist parties are challenging the hegemony of Left-socialist regimes in power in France, Germany and the UK.

So, will carbon credits help Europe and Great Britain achieve their dystopian ‘Net Zero by 2050’ goal?

International Carbon Credits – Let’s Try It Again, Shall We?

Under the UN Framework Convention on Climate Change (UNFCCC), Article 6 of the 2015 Paris Agreement allows countries to voluntarily cooperate with each other to achieve emission reduction targets. Similar to the Clean Development Mechanism of the Kyoto Protocol which entered into force in 2005, Article 6 establishes a mechanism for trading GHG emission reductions between countries.

Instead of expensive domestic investments to improve industrial plant energy efficiency, prevent deforestation and other CO₂ abatement projects, the Kyoto Protocol allows developed economies to offset their emission by buying cheaper carbon credits from developing countries.

However, in 2013, the European Commission banned the purchase of international carbon credits from its Emission Trading Scheme after a flood of cheap credits, mainly from China and India, contributed to a steep drop in the EU’s carbon price. Instead, the EU focused on purely domestic projects to reduce emissions which supported the bloc’s focus on domestic solar and wind projects as sources of carbon credits.

As Europe struggles with economic weakness, strained budgets and new demands for public financing, EU Climate Commissioner Wopke Hoekstra is once again considering international carbon credits to support attaining its 2040 emission reduction target as he tries to contain a widespread backlash against the climate ambitions of Brussels bureaucrats. The European Commission is considering allowing international carbon credits towards its 2040 climate target to alleviate the CO₂ mitigation efforts the bloc’s rules demand from its already struggling domestic industries.

Allowing cheaper international carbon credits will also enable the EU to garner support from developing countries as it seeks to grow alliances against the climate-sceptic Trump administration. The EU seeks to make its much-derided green goals more palatable to its citizens and businesses. By purchasing international carbon credits, the EU can also get key developing countries such as China, India, Indonesia, South Africa and the like – which would benefit from supplying carbon credits to Europe – on-board with the UN-led globalist climate agenda.

How Carbon Credits Work (or Don’t)

EU or UK-based project developers pay a company or industrial plant elsewhere in the developing world to take some action – such as saving a forest from being felled for agriculture, planting trees, using renewable energy instead of fossil fuels or installing more energy-efficient machinery – to reduce global carbon emissions. One carbon credit equals one metric ton of CO₂ emission abated.

The firm, industrial plant or individual undertaking this abatement will get paid by the project developer after he has engaged a certification body to verify the abatement project and issue the credits. The developer then engages a broker to sell the verified credits on to the ultimate buyer. The ultimate buyer, a firm or industrial plant in the EU, is incentivised to buy such credits as a cheaper option than trying to directly abate the carbon emission in its own business or plant.

However, often no genuine emission cuts actually take place. One investigation concluded that over 90% of carbon credits issued for rainforest protection by the largest carbon credit certification body “had no benefit to the climate”. According to a 2023 article published by the Guardian, more than 90% of the rainforest offset credits issued by Verra – the world’s leading carbon standard for the rapidly growing $2 billion (£1.6 billion) voluntary offsets market – were “likely to be ‘phantom credits’ and [did] not represent genuine carbon reductions”. ‘Saved’ forest credits are among the most commonly used by companies. The Guardian named Disney, Shell and Gucci as companies that bought Verra-issued credits. Another study which examined the effects of 26 ‘voluntary avoided-deforestation projects’ projects in six countries in Latin America, Africa and Asia found that “most projects have not significantly reduced deforestation”.

For carbon credits to be genuine – that is that they represent actual reduction in CO₂ or greenhouse gas emissions – two scenarios need to be compared. The first, or baseline, is ‘business-as-usual’, which is the outcome if there were no abatement project. The second is the scenario with the successful implementation of the abatement project. In other words, the carbon credits must result from ‘additionality’, that is if the project did not occur, the CO₂ or greenhouse gas (GHG) that would have been emitted.

How does one assure additionality? A farmer or plantation owner may not have had any plans to fell a nearby forest but certainly would have an incentive to claim such plans in order to secure payments in the promise that he will not do so. A factory owner who was already intent on upgrading his machinery for more profitable, energy-efficient newer stock can assert that he had no such plans and claim payment for an emission reduction that would have occurred in any case.

A 2023 study in Science found that incorrect baselines led to carbon credits issued in the Democratic Republic of the Congo, Tanzania and Zambia with no evidence of avoided deforestation. The projects were not additional, and the forests were not at risk of being cut down.

There are other incentives at play which lead to poor quality or fake carbon credit certificates. As certification firms get paid by abatement project developers there is an incentive for the certifier to approve projects. This is similar to the practices of credit rating agencies, which played a significant role at various stages in the American subprime mortgage crisis that led to the great recession of 2008-2009. With poor-quality or fraudulent credits flooding the market, the price of ‘nature-based’ avoidance credits went from $11.50 per ton of CO₂ to just $3.50 over the course of 2023.

Carbon Credits as Indulgences for Modern Liberals

The corrupt Catholic church in 13th to 15th centuries began selling indulgences with the promise of reduced time in penance or purgatory in return for money, laying the basis for Martin Luther’s Reformation movement. We can see striking modern parallels with the medieval Catholic practice. We have seen how the EU now wants to return to buying such credits in the international market, despite the history of fraud and low-quality credits being issued by leading carbon certification companies. According to Linda Kalcher, Executive Director of think-tank Strategic Perspectives, “The list of scandals linked to international credits is long: fraud, lack of environmental integrity and the drastic collapse of the (EU) CO₂ price [in 2012].”

Closer to home, in an excellent forensic analysis, David Turver explains how UK power generators assure their customers that they are supplying ‘green’ electricity even when the wind is not blowing. Many of our electricity suppliers, for example Octopus Energy, Ecotricity, EDF, Scottish Power, Eon, SSE and British Gas, claim to be providing 100% green or renewable electricity. Some of these companies even offer their customers the choice of which renewable technology they might want to be supplied with.

How do they do it, when NESO provides the following data on power generation by fuel type for 2024?

Turver calls it the “REGO racket”. The acronym stands for Renewable Electricity Guarantees of Origin. He explains the modern indulgence racket succinctly as follows:

Ofgem tells us REGOs are issued for each MWh of electricity generated by accredited generators of renewable electricity. REGOs can be traded independently of the power that is generated. So, electricity suppliers can sell electricity generated by gas or coal, but then buy REGOs produced at a time when there was a surplus of renewables and use the REGO certificate to pretend that the electricity they sold was in fact renewable.

It’s a wonder how this is allowed by the Advertising Standards Authority, which is nominally committed to the principle of ‘truth in advertising’. Turver is scathing, branding it a “greenwashing racket”.

Buying a piece of paper can never negate the emissions from the actual generation. REGOs amount to little more than a greenwashing racket. Claims of 100% clean renewable energy from all these suppliers simply must be false. I do not expect Ofcom or the ASA to act any time soon.

The taste for carbon indulgences goes beyond the EU and UK power generators. At a personal level, most of us have come across options to pay a little extra for our airline flights or our meals to ‘offset’ our ‘carbon footprint’ caused by flying or by eating in restaurants. That way, one might fly or dine without a ‘guilty conscience’.

One may also note that the entire debate over carbon credits does not raise the prior issue as to whether CO₂, the trace molecule of life that makes plant photosynthesis possible, is capable of causing an impending climate apocalypse.

Perhaps Richard Lindzen, Alfred P. Sloan Professor of Meteorology at MIT from 1983 until his retirement in 2013, put the point across best:

What historians will definitely wonder about in future centuries is how deeply flawed logic, obscured by shrewd and unrelenting propaganda, actually enabled a coalition of powerful special interests to convince nearly everyone in the world that CO₂ from human industry was a dangerous, planet-destroying toxin. It will be remembered as the greatest mass delusion in the history of the world – that CO₂, the life of plants, was considered for a time to be a deadly poison.

It would seem that in our so-called ‘age of science’, we share a positively medieval taste for indulgences in our mass delusions.

This article was first published in The Daily Sceptic https://dailysceptic.org/2025/04/11/europe-resorts-to-the-carbon-indulgences-scam-again/