A carbon offsetting project set up by Harvard University’s endowment fund has sold millions of junk credits to major international companies, the Bureau of Investigative Journalism (TBIJ) can reveal.
After establishing the scheme in 2012 on land it has bought in Uruguay, Harvard ended its involvement when it sold the land across two deals in 2017 and 2019 worth a combined $450m. But the project is still active today and has sold enough credits to have supposedly offset over 5 million tonnes of CO2 emissions—roughly equivalent to what a million cars would produce in a year.
EasyJet, British American Tobacco and Ernst & Young are all among the biggest buyers of credits from the project.
The current owner of the project told TBIJ it had received no revenues from sales of carbon credits to these companies. A spokesperson for the Harvard fund said it does not comment on individual investments.
The project was given the green light to sell carbon credits in 2012 by Verra, the carbon credit standards body. But in 2022 it was given a rating of zero by an agency that assesses the effectiveness of carbon offsetting schemes.
The rating means that the credits, which should each represent one tonne of emissions avoided or removed from the atmosphere, represent no change. In other words, the project has had no effect on the environment at all.
The Guanaré Forest Plantations Project, a vast reforesting scheme, was set up following the 2006 purchase of an area of land in eastern Uruguay about the size of Washington DC. It was ultimately paid for by the university’s endowment fund, Harvard Management Company (HMC), a $50bn vehicle which invests to support research and student bursaries.
Though the land was bought through two companies set up by HMC, and the running of the project was outsourced to a Uruguayan forestry company, all the money made from sales of carbon credits went to the Harvard fund.
What is carbon offsetting?
Carbon offsets allow companies to make up for the carbon emissions they create by paying to avoid or remove emissions elsewhere. Each carbon credit represents a ton of carbon dioxide either removed from the atmosphere or prevented from entering it in the first place.
Offsetting has been the subject of much debate. Some argue it is necessary and provides much-needed incentives for investors to channel their money into green initiatives. Others have said it offers polluting companies a way to avoid reducing their own greenhouse gas emissions.
The $2bn global market for carbon offsets has been hit by a number of recent scandals – with reports claiming that many credits do not represent genuine carbon reductions.
On day one of this year’s Cop climate talks in Baku, an early agreement was reached over rules around the creation of a global carbon market, in theory paving the way for rich countries to pay for cheap climate action abroad.
Among the project’s customers was British American Tobacco, which purchased 130,000 credits to offset emissions from its flagship product Vuse, marketed by the company as “the world’s first carbon neutral vape brand”.
The coffee company Lavazza also bought credits from the project to offset the emissions of a supposedly “carbon neutral” coffee capsule it launched in 2022.
Renoster, the agency that gave the project a zero rating, raised three criticisms of the scheme. The first hinged on a factor known as “additionality”, which exists to prevent companies from going about their normal business—for example running a commercial timber project—and selling carbon credits on top. If a project could run without carbon finance, then it cannot be considered additional.
Documents submitted to Verra state that the project’s objective is to create “high value” timber products. Renoster ruled that carbon finance had ultimately made no difference. “We believe that these trees were going to be planted regardless of the project,” it said.
The second criticism was that the scheme’s “baseline assumptions” were wrong. A baseline number is something given to every carbon offsetting project, against which its removals are measured. The project had a baseline of 0, meaning no emissions whatsoever would have been removed from the atmosphere if the scheme did not exist.
Renoster said that baseline was “not a reasonable assumption for the region” because large portions of nearby land were already being converted from pasture to eucalyptus plantations.
Renoster’s third criticism was that the project was unlikely to run its full course, which was projected to be 100 years.
“We do not believe that Guanaré’s carbon credits represent true emissions reductions,” Renoster’s chief science officer, Elias Ayrey, told TBIJ. “We would not consider carbon neutrality claims based on these particular credits to be legitimate.”
The current owners of the project said: “Carbon credits have been critical for achieving the rates of return that investors required when the project started.” They said this cash means they can let the trees grow for longer before they are harvested.
A second agency, BeZero Carbon, also assessed the project and raised similar concerns around additionality and baseline assumptions. It found that the project had a “low” likelihood of achieving the purported emissions avoidance or removal.
The project has also been criticised by World Rainforest Movement, an organisation that monitors the Uruguayan forestry industry, which said: “Industrial tree plantations in Uruguay have led to land concentration by a small group of corporations and investment funds. They replace an extremely important ecosystem—grasslands—to plant tree monocultures, destroying biodiversity and watersheds.”
A BAT spokesperson told TBIJ that its carbon neutrality claim was independently validated in 2021. Lavazza said it had removed the claims from its products and is dedicated to transparency in all its sustainability initiatives.
An EasyJet spokesperson told TBIJ that it transitioned away from offsetting in 2022 but until then “had robust due diligence processes in place”.
Ernst & Young said it selects offsetting projects which have been certified against internationally recognised standards and continues to work on its due diligence procedures. It said it retired all remaining credits in this project in 2023.
This story was updated on 20 November 2024 to clarify the response given to TBIJ by the Harvard fund.
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