The treacherous nature of measuring the veracity of carbon offsets was highlighted once again late last month when the United Nations suspended the firm TuvSud, responsible for nearly one quarter of the carbon offsets on the market today. The German company is one of twenty-six companies the UN has permitted to act as what it calls ‘validators’ of the offset system, charged with affirming that promises to reduce emissions in a developing country project–wind power, solar energy, methane reduction, etc–actually deliver the promised reductions. On March 26, the UN removed the company’s ability to continue validating those projects–creating overnight uncertainty in the markets over the veracity of the projects it had been hired to validate. Such offsets based in developing countries are expected to account for at least a third of Europe’s anticipated emission reductions by 2012, according to recent estimates by the European Environment Agency.
At the time of its suspension, TuvSud was the second biggest validator in the world, responsible for more than 1,200 projects over the past eight years. The UN’s Executive Board cited the company’s willingness to approve projects despite concerns over their actual emission reduction potential–a quality known as additionality–and the lack of technical experience of personnel assigned to the task. Some of the company’s approved projects have been highly controversial, such as the Xioxai dam in China–which has led to the eviction of 7,500 people from their homes, according to the International Rivers Network. Credits from that project have been used by major European companies such as the giant German utility RWE.
The action comes on the heels of two other suspensions of validation firms for similar reasons, and which together represented more than half of the carbon offset market, as I wrote about recently in Harper’s. Those two validators, the Norwegian company DNV and the Swiss company SGS, have since been reinstated. But the latest suspension means that two-thirds of the offset projects now available to industries operating under the emission reduction requirements of the Kyoto Protocol were, according to a database compiled by the UN Environment Program, validated by firms who’s methodologies, skill levels and measurements have been called into question by the United Nations, which is charged with overseeing the offset market.
I also found that the United Nations does not have the power to pull those questionable credits off the market–which means that European industries are still using them to meet their emission limits. The credits bearing TuvSud’s stamp of approval prior to its suspension, like those of DNV and SGS prior to their suspension, are still available for purchase by industries seeking to use offsets to continue emitting greenhouse gases at home–though they may leave the mistaken impression, due to faulty measurements, of more emission reductions than have actually occurred.