AUSTIN, Texas — The voluntary carbon market isn't new, but it has boomed in the U.S. over the past few years – and so have the concerns with it mainly being unregulated.
Scientists said there is more carbon dioxide in the air right now than in hundreds of thousands of years. Our trees and forests are doing what they can to filter it out of the air, but for decades, some scientists have said our lifestyle of burning toxic fossil fuels, which emit carbon dioxide into our atmosphere, is changing our world and there's only so much Mother Nature can do.
CO2 comes from some of the power plants that produce our electricity, most of the cars we drive, the planes we fly and the factories that create them. Most scientists argue the more CO2 in the air, the hotter it gets, and the more extreme our weather becomes.
"This is not something that's going to stop," said University of Texas geological science professor Dr. Dev Niyogi. "Just this year, it was not special. It is something that is going to probably multiply itself and create more cascades of hazards. Are we really ready?"
Niyogi specializes in urban sustainability. He works with the City of Austin to find ways to lower extreme heat.
"If we don't do anything, if we do not take the urgency of the issue into consideration, we are going to be much more at risk in terms of every investment we have, whether it's our own personal property," said Niyogi. "It is in terms of the infrastructure the City is building, or it is the culture that the City has grown into – all of that can be harmed because we believe nothing is changing," said Niyogi.
What businesses and cities are doing
Businesses understand the risks, so over the past few years, thousands of companies and cities have voluntarily set goals to become "carbon neutral" or have net zero emissions by 2040, including the City of Austin.
"So when we say net zero emissions by 2040, we mean reducing emissions in our community as much as possible," Zach Baumer of the Austin Climate Protection Program.
Baumer is Austin's climate program manager. His team develops the City's plan to decarbonize. Internally, the City has an annual goal to reduce emissions by 5%, and to do that the City buys a small number of carbon credits, or offsets.
"It's not a large amount of money, but it does support real reductions and supports the carbon market," said Baumer.
When it comes to the larger goal of net zero by 2040, the City could end up buying more credits when the time comes. Baumer estimates it could make up about 10% of the City's carbon reduction.
How the carbon market works
The carbon market is a global trading system where carbon offsets are bought or sold.
In most cases in the U.S., if businesses can't meet their goals to reduce their carbon footprints by actually emitting less carbon through technology improvements or production changes, they can buy these credits from projects dedicated to removing greenhouse gases.
One carbon credit offsets 1 metric ton of carbon dioxide.
"People who get it, they absolutely will buy it," said Dr.Niyogi. "People who are not understanding the process or who can find flaws in it, they clearly see that this is not going to be the way we are going to solve our problem for this planet, by just simply saying virtually we have moved some carbon."
There are multiple ways to avoid emissions or sequester carbon to create a carbon offset credit. Standards organizations, usually nonprofits, use what they call science-backed protocols and methodologies to develop rules to certify if carbon is avoided or taken out of the atmosphere.
Those non-government entities create registries of credits that can then be bought and traded on carbon markets. This is primarily unregulated in the U.S., with the exception of California.
"The EPA is not involved," said Baumer. "There's no state or federal laws mandating any of this. It's all just voluntary."
An emerging market
Environmental lawyer and Rice University professor Jim Blackburn started the nonprofit BCarbon registry in 2021.
"Measurement is really the cornerstone of everything that we do," said Blackburn.
He said, like many other registries, his is a start-up and still working to create more measurable and defensible systems.
"We're trying to work with the big ones – like A&M and other universities, Kleberg Institute down in South Texas – working to try to understand how to come up with better range management concepts with regard to keeping soil carbon in the ground," said Blackburn.
Blackburn said there are numerous forms of carbon credits, but he mainly works with soil carbon credits, forest carbon credits or coastal blue carbon credits. They are verified differently.
"So with soil carbon, we require if you want to participate, you have to do a statistically significant sampling of your property to tell us what the carbon is, to begin with," said Blackburn. "Then you come back five years later and do a second round of sampling and we issue credits for the difference between your five and your one."
Verifying carbon credits through rigorous testing can take years, but reforestation is one of the easier projects to measure. Blackburn said you take a measuring tape and measure how much the trees have grown over time.
"Within that time, they're sequestering carbon," said Valerie Tamburri, TreeFolks Reforestation manager. "They're getting bigger."
Tamburri runs the TreeFolks reforestation program. The Austin nonprofit works with private landowners and the City of Austin to reforest flood plains and watershed areas.
Part of the deal, the trees can't be cut down for 25 years.
"So these trees around us, they'll intercept some of the rainwater and help with flooding, for instance, and also help to filter the water as it makes it down, and also helps to offset heating and cooling costs because it provides regional cooling," said Tamburri.
The carbon credit payments TreeFolks receives just cover its planting costs.
TreeFolks' biggest customer is the City of Austin.
"We know the people at TreeFolks," said Baumer. "The trees are getting planted in our city, on City-owned land," said Baumer. "We can go out and see them and we know it's a real thing happening in our community."
Baumer said that while it's great they can verify the credits are actually happening, the downfall is, it isn't enough to offset large emissions.
TreeFolks plants about 80 acres of trees a year. One acre of land in Central Texas can capture about 4 metric tons of carbon dioxide each year. According to the EPA, the average car in the U.S. will produce 4.6 metric tons in the same time period.
Unregulated claims of carbon neutrality
A big concern with the unregulated nature of this whole process is that these carbon credits create a false sense of security.
"They might be entirely wrong or unverifiable, and that's a huge risk we are putting in the context of placing our entire carbon future, which is essentially being translated as Earth's future, into something which we can't verify," said Niyogi.
An investigation by the British news outlet The Guardian found that 94% of forestry credits certified by the world's leading provider were not accurate and didn't reduce carbon.
Greenwashing is another concern for environmental advocates. It's when companies may claim they're more sustainable than they really are.
"You'll see Wells Fargo is carbon neutral, like you'll see these large carbon neutrality claims," said Baumer. "The issue with the carbon neutrality claim, I think, can be that it's then viewed as, 'Well, we're done. We don't have anything else to do.' That they could keep burning fossil fuels and emitting then continuing to cause climate change."
As buyers continue to try to understand the value, the payout continues to be unstable.
"Huge disparity, if you will, in the market," said Blackburn.
Blackburn said forest credits can range from $2 to about $40 per credit in the U.S.
"It would help immensely if the federal government had a program or the EPA set laws and standards for offsets," said Baumer. "It would help a lot because right now it's just kind of everybody, the whole market, the whole thing is at risk. Everybody's at risk."
California is the only state in the U.S. with carbon emission regulations for some business sectors.
"It's just politics," said Baumer. "It's culture wars of the United States of who believes in supporting climate change and who doesn't. A lot of it's gotten wrapped in that, sadly."
All of these experts agree that with more resources, the carbon market will play a role in saving our planet in the future, but it's not the only way to protect it.
"The best time to plant a tree is 20 years ago, so none of us are planting them for ourselves, really," said Tamburri. "Together, we can all take steps to make the world safer. We're going to pass them down to the kids and grandkids."
Experts said the U.S.'s voluntary carbon market is set to become at least five times bigger by 2030, going from worth $2 billion in 2021 to anywhere from $10 billion to $40 billion by the end of this decade.