A27: Climate Change Part 9: Carbon Credits

This will be my second to last article on climate change, so please enjoy.

Carbon credits, often called offsets, are certificates representing one tonne of CO_2e that has allegedly been prevented from being emitted or has been removed from the atmosphere.

Before discussing these credits, we must address why they exist. You have certainly heard the endless sustainability mantras and climate objectives touted by every multinational corporation. In the last few years, the concept of “net-zero” has moved from obscurity to center stage. In 2019, net zero targets covered 16% of global GDP; by 2025 that figure has ballooned to 83%.

Does this mean corporations will actually reduce their carbon emissions to zero? Of course not. In reality, these firms are expanding production. So, how do we square this circle? They use reduction projects.

Reduction projects are established to slow global heating. Most are avoided-emission projects that prevent greenhouse gases from being released, rather than remove them from the atmosphere. 

The process is deceptively simple: firms calculate their annual emissions, and, after purportedly cutting some via biotic fuel and renewables, they purchase an equivalent number of carbon credits. These credits are used to offset their remaining footprint, allowing them to claim massive reductions on paper.

Consider these two examples:

Most carbon credits are currently purchased directly from project developers or through private brokers. However the ultimate goal is not a piecemeal market, but a fully integrated international system. The question remains: how will these disparate projects all be connected into a single, global ledger.

To establish a global carbon credit system, international mandates are required to enforce regulatory consistency. Unlike oil or steel, carbon credits are not physical goods, they are theoretical concepts. This framework is anchored in Article 6 of the Paris Climate Accord:

By January of 2026, 194 states and the European Union had ratified the agreement, representing 98% of global emissions. While President Trump withdrew the United States on January 27th, 2026, any future ratification could bring forth its implementation.

This agreement would effectively merge Canada's carbon pricing, China's national market, the European Union’s Emissions Trading System, and California’s cap and trade system, etc. into a single global clearinghouse. Once this network is live, the money flow will be truly begin.

Remember the carbon credit market grows and shrinks by lawmaker’s pen, not by actual production. If by 2030 every country adopted a national carbon system, signed the Paris Climate Agreement, and implemented a national carbon system, the growth trajectory would become exponential.  

Beyond these national markets lies the international credit system. Currently valued at $4 billion, the Institute of International Finance (IIF), with support from McKinsey, estimates that the voluntary carbon credit market could reach $50 billion in 2030. At a value of only $300 million in 2020, that would represent a 16,667% increase in a single decade. If it grows by just a tenth of that percentage between 2030-2040 we are looking at a voluntary credit market worth $833 billion.

Are you seeing the money yet? It gets better: most of these certified credits are fraudulent.

Research from an international team found just eight out of 29 Verra-approved rainforest projects showed evidence of meaningful deforestation reductions.

Journalists did further analysis, discovering that roughly 94% of the credits produced should not have been approved. Credits from 21 projects had no climate benefit, seven had between 98% and 52% fewer than claimed using Verra’s system, and one had 80% more impact.  

Verra is the largest single certifier in the world. To show you their extent, in 2021, 81% of carbon credits from Africa were certified by Verra. If they are miscounting, everyone is.

“Yet, Gucci, Salesforce, BHP, Shell, easyJet, Leon and the band Pearl Jam were among dozens of companies and organizations that have bought rainforest offsets approved by Verra for environmental claims.” Companies are attempting to fulfill their climate goals with phantom credits.

Let’s look what Barbara Haya the director of the Berkeley Carbon Trading Project had to say on the matter:

If the miscounting of carbon credits were the end of it, we would call it a failure. However, let us look further to what the Science Based Targets Initiative (SBTi), the gold standard for corporate net zero policy, has to say on these corporate mitigations: 

Based on their standard, every company needs to reduce their emissions directly by 90%, and these reduction offsets cannot count towards that aim. So, how exactly are these companies going to go net zero?

Biofuels are more carbon-intensive in their production than gasoline. I have already shown you how solar and wind are neither renewable nor sustainable; here is further evidence.

Just in the past year, Solar panels rose by 25% and wind turbines 21%. Energy storage increased by 42%. When it comes to steel, seventy percent of global steel is produced directly via coal, while the remaining 30%, the so-called ‘green’ secondary steel, is produced in Electric Arc Furnaces overwhelmingly dependent on fossil fuels. Finally, all of this production will be transported by oil. 

Can someone please tell me how we expect these companies to reach net-zero? Perhaps the 9,000 corporations with 1,000+ employees will be able to afford their own emissions departments, shop around for carbon reductions, and play the mathematical games required to seem green, but what about the other 99.9% of American businesses? What are they to do?

Also, if we are serious about reducing carbon emissions to net zero then a carbon tax cannot be a mere $20, but $100’s per tonne of C0₂. To see the effect of such a policy, let us look at a few examples.

The marginal cost per MWh for a coal plant is about $41.32 and for a gas turbine is $22.95. Coal produces 0.96 tonnes of C0₂ per MWh and natural gas 0.40; meaning a $200 carbon tax would lead to a 464.71% and 348.58%  increase in electricity prices respectively.

Let us look at steel. Every tonne of crude steel creates 2.18 tonnes of CO_2e in its production. With a the same $200 carbon tax , the cost of crude steel production would rise by $436. As of March 31, steel traded at $1,048 per tonne meaning we would see a 41.6% rise in the price of steel.

These are costs only for steel and electricity. What do you think would happen to the rest of our economy? None of our producing and manufacturing classes will survive this, and the most ridiculous part is that our emissions will not have been reduced, but merely shipped to other countries. It is national suicide, with the last remnants of our once great industry being driven from our shores to the benefit of Chinese and the Indians. How much longer shall we hand over our productive capacity to the third world? How much longer shall we abandon our American blood to these foreigners?

Oh, but I am the conspiracy theorist because I believe in basic supply chain management and arithmetic. I demand an answer to how this agenda will magically work out before my generation is sacrificed on the altar of this green religion. Show me the math. Show me the science. I am sick and tired of all this fake preaching which, if questioned, responds with name calling and personal insults instead of intellectual thought. Adults think through fact and reason; infants resort to shouting and temper tantrums, yet somehow the latter is seen as acceptable behavior nowadays. How utterly disgusting.

Your Humble and Obedient Servant,

Francisco Pereira