Former EPA chief calls out ‘systemic’ auditing failures in voluntary carbon markets

Cynthia Giles co-authors paper opposing ICVCM position

The top environmental enforcement official under former US president Barack Obama has warned that auditing “cannot guarantee” the credibility of carbon offset projects. 

Cynthia Giles, who led enforcement for the Environmental Protection Agency, co-authored a paper with legal academic Cary Coglianese, which claims “research teaches, and experience confirms, that third-party auditors selected and paid by audited organisations cannot guarantee carbon offset credibility”. 

The conclusion runs counter to the stance taken by the Integrity Council for the Voluntary Carbon Market that third-party validation is “essential to the environmental integrity of carbon-crediting”. 

Verra, the world’s largest voluntary carbon credit registry, wrote in January that such assessments “ensure that a project’s climate impacts are real and permanent”. 

But Giles and Coglianese argue that carbon credits are inherently ill-suited to audits because of their “counterfactual” nature. 

“Environmental markets that work well require reliable measurement, such as in pollution allowance trading markets that rely on real-time monitoring of emissions,” they said.  

The offsetting market, they continued, was on the “opposite end of the measurement credibility spectrum due”. 

This is down to “the plethora of unmeasurable assumptions and judgments that underlie offset credit claims”. 

The paper examines 95 projects certified by Verra, but later rejected or suspended by the body over their credibility.   

More than 300 audits had been done on the projects by 21 different certified auditors, which Giles and Coglianese say demonstrates the problem is “not just an isolated concern with a few auditing firms”. 

They argue there is “nothing to counteract economic self-interest and self-serving bias in the offset markets” because all participants “have an interest in overclaiming carbon benefits”. 

The pair were pessimistic about finding a solution.  

“Under any scenario, if 80% or more of the offset credits continue to lack integrity, as independent studies have suggested is the case today, it is hard to see how auditors could maintain their livelihoods if they were to disapprove credits at that rate,” they wrote