by Permian Global

August 18, 2022

Courtesy of Verra (Author : Steve Zwick of Bionic Planet)

An open letter to Shigesaburo Okumura, Editor-in-Chief of Nikkei Asia

An unofficial translation of this document is available here. Please be advised that we have generated this translation as a convenience to stakeholders in Japan, and if there are any discrepancies between this and the English version, the English version should be given precedence.

Dear Mr. Okumura,

Over the past nine months, Nikkei Asia has published a series of factually inaccurate and misleading stories that appear designed to do nothing but discredit the use of carbon finance to save forests and promote sustainable land use – two practices critical to meeting the climate challenge.

All of this coverage flows from one team of reporters who have wantonly, willfully, and repeatedly parroted an inaccurate and illogical narrative peddled by a few outlier activists whose views run contrary to the preponderance of evidence and scientific thought. As a result, your coverage undermines both the global effort to reverse climate change and the financial viability of organizations engaged in meeting it. This is journalistically lazy, morally reprehensible, and materially irresponsible to your stakeholders.


The Intergovernmental Panel on Climate Change (IPCC) concluded decades ago that it is impossible to meet the climate challenge without overhauling humankind’s management of forests, farms, and fields. More recently, its 2019 special report on lands emphasized the need to support “policies for reducing emissions from deforestation and forest degradation and fostering conservation (REDD+).”

REDD+ is an umbrella term for various systems and procedures that use carbon finance to address one of the most vexing elements of the climate challenge – namely, deforestation, which generates 13 percent of net greenhouse gas emissions from human activity.

REDD+ traces its genesis to the 1979 World Climate Conference (WCC), where delegates unanimously declared that “deforestation and changes of land use” were two of the three leading sources of human-emitted carbon dioxide.

In 1992, world leaders created the United Nations Framework Convention on Climate Change (UNFCCC), which called for the “conservation and enhancement, as appropriate, of sinks and reservoirs of all 11 greenhouse gases not controlled by the Montreal Protocol, including biomass, forests and oceans as well as other terrestrial, coastal and marine ecosystems.”

The UNFCCC spawned dozens of efforts to create science-based market mechanisms for financing conservation, but these efforts encountered stiff ideological resistance from activists who see markets as anathema to environmental protection.

Some of this early resistance reflected legitimate concerns, but the science underlying these mechanisms advanced throughout the 1990s and continues advancing to this day. Rather than acknowledge the progress, however, a handful of organizations lifted a page from the climate-denial movement to undermine trust in markets by turning the process of honest inquiry against itself. Specifically, they cherry-picked findings, exaggerated uncertainty, and ignored scientific advances, as biologist Philip Fearnside documented in 2001.

“While the debate is often couched in scientific terms and with appeals to high universal principles, the positions of the different partisans to the debate are better understood in terms of hidden agendas, conscious or not,” he wrote.

The Verified Carbon Standard

It’s impossible to achieve 100 percent consensus in something as complex as forest carbon finance, where social sciences are layered on top of physical sciences, and uncertainties can be accounted for but not eliminated. For that reason, a coalition of NGOs and businesses created the Verified Carbon Standard (VCS) in the mid-2000s as a mechanism for incorporating the broad views of most experts into a recognized standard.

Originally called the “Voluntary Carbon Standard,” the VCS works by providing a vehicle through which any entity that identifies an unfunded climate solution can develop a stepwise “methodology” for addressing the challenge through climate finance. In order to ensure these methodologies reflect the preponderance of scientific thought, VCS reviews all proposed methodologies internally and puts them out for public consultation before they are either recognized by the standard or deferred.

Your reporters have ignored this rigorous and inclusive process to build narratives on unsubstantiated outlier opinions.

While outlier views are welcome and necessary for the advancement of science, they should never be given more weight than majority views that have survived multiple tests. Current methodologies provide actionable models that work better than alternatives until something better comes along, at which point they change – but only after that better way passes the same tests that the earlier ones did.

Below, you will find annotated versions of two of the three stories as they appeared in the English version of your publication. We have not annotated the first but instead linked to a rebuttal posted by one of the aggrieved parties.

As you read these stories in context, you will find a pattern of distortion that cannot be dismissed as mere incompetence but instead indicates a willful intent to mislead.

Verra recognizes and respects the need for reporters to speak off the record, especially when the subject matter is something as complex as carbon finance. Nonetheless, if your reporters wish to challenge our account of the correspondences that led to this rebuttal, we will gladly grant permission to openly share the private correspondences they have had with us, provided you grant us the same privilege.

First Story

Headline: Indonesian carbon credit project appears to betray its purpose

The story focused on an Indonesian project implemented when local regents were rushing to issue concessions for agricultural development on peatland forests. Your reporters claimed, wrongly, that a federal moratorium on these activities protected the areas that the project saved – ignoring the fact that the moratorium came later and applied only to new permits.

“As explained to the journalist, the baseline assessment reflects the situation at the time and most probable outcome for the forest area in 2010 which, as described in the PDD, is that permission would have been granted to three companies for industrial plantation forest,” wrote the project proponent, Permian Global Capital.

You can find their full rebuttal here.

You can find Verra’s rebuttal here.

Second Story

Headline: Opaque carbon credit market undermines fight against climate change

The reporters reference an “opaque” carbon market but then build the entire story on information from the Verra registry. This is inherently illogical because it demonstrates the market’s transparency.

Sub-Header: Companies flock to cheaper CO2 offsets, whose effect is hard to gauge

Caption: Many carbon emissions offsets are issued based on forest preservation efforts, but the effectiveness of such projects is difficult to measure over the long term.

Yes, it’s difficult to measure the effectiveness of such projects, but that’s why thousands of scientists, economists, and stakeholders spent decades developing the procedures for doing it right.

The methodologies in question draw on time-tested practices from fields as diverse as environmental impact assessment, forestry, and rural planning. They also update over time as reality changes and science advances. By stating it’s “difficult,” your reporters imply they are unreliable. This is only true if you compare them to imagined states of perfection – a hallmark of the science denial movement.

Nearly 40 percent of carbon credits purchased by companies are more than five years old, new Nikkei analysis of global data shows, a trend that experts say threatens progress on cutting greenhouse gas emissions.

This “trend” is neither new nor nefarious. Indeed, the chronic oversupply of REDD+ credits was a dominant theme in the marketplace for a decade, and it emerged because governments and NGOs recognized both the urgent need to save forests and the slow pace of climate policy. In response, they encouraged carbon crediting programs to promote early action.

The strategy worked, and early movers took on tremendous risk to save vast swathes of forest. The challenge now is to secure the gains already made and expand to larger areas.

Your reporters, however, argue that we should renege on commitments to early movers because the rest of us took too long to wake up.

A carbon credit is a tradable right that allows the holder to emit 1 ton of CO2.

A carbon credit is NOT a “tradable right that allows the holder to emit 1 ton of CO2.” That’s a carbon allowance, which governments issue in a cap-and-trade program. The article, however, is about carbon offsets, which are verified units of emission reduction or removal that funnel money to the most cost-effective mitigation strategies. They are a tool for accelerating reductions, not avoiding them, and your reporters are perpetuating old myths by pushing such simplistic and distortive statements.

The credits can be issued based on the amount of CO2 absorbed by protecting forests or introducing renewable energy, for example. The effect of the emissions cuts is validated by a third party and the credits issued through these efforts can be traded on carbon markets.

This paragraph is accurate for afforestation/reforestation, but not REDD+ because such credits primarily (but not exclusively) represent emissions reduced and not removed.

This is a subtle but essential distinction that your reporters consistently blur, rendering many of their points meaningless or misleading. They also repeatedly go out of their way to point out that credits are “traded on carbon markets,” as if that were a nefarious attribute. It is not. Carbon credits exist to accelerate emission reductions, and trading promotes scalability, which is needed to meet the climate challenge.

Nikkei analyzed data going back to 2009 published by Verra, one of the world’s largest carbon offset accreditors, looking at some 99,000 credits used to offset emissions of 192 million tons of CO2. The data included the names of the companies that bought the credits.

This makes no sense because every credit represents the equivalent of one metric ton of carbon dioxide either removed from the atmosphere or prevented from entering it. For that reason, 99,000 credits cannot be used to offset 192 million tons of CO2.

Furthermore, your reporters again cite Verra data – which means they again illustrate the system’s transparency and not its opaqueness.

Nikkei’s analysis found that 38 percent of the validated credits purchased by companies – equivalent to 73 million tons of CO2 – were over five years old, while more than 4 percent were at least 10 years old. Only 37 percent were three years old or less.

Again, this is old and well-publicized news that has nothing to do with opaqueness and everything to do with the fact that demand for climate action was very low until recently – partly because news outlets, including Nikkei Asia, failed to cover the enormity of the climate challenge, leading to reduced demand for climate solutions.

While older credits are not necessarily less effective than newer ones at reducing carbon emissions, they can hamper efforts to cut greenhouse gasses, because, once the credits are issued, it is rare for a third-party organization to monitor whether the projects upon which the credits were based, such as afforestation projects, were properly maintained.

This is flat-out wrong. Forestry projects are monitored throughout their crediting period, and Verra has proposed leveraging new technologies and insurance mechanisms to extend that to 100 years.

More importantly, your reporters ignore the fact that all VCS forestry projects must put a risk-adjusted percent of their credits into a global buffer pool, as clearly laid out in Section 2.4 of the Verified Carbon Standard. This buffer pool acts as an insurance fund against reversals.

When credits are issued, they decouple from the project and become separate units backed by the non-permanence buffer. If a reversal occurs, a number of credits equal to the reversal is canceled from the global buffer pool.

Finally, afforestation (tree planting) and avoided deforestation are two different things with different dynamics. By using these terms interchangeably and ignoring the existence of a global buffer pool, your reporters are pushing a simplistic narrative that diverges sharply from reality.

If issuers of credits can generate sufficient revenue from their carbon-cutting projects to expand their forest conservation and afforestation efforts, trading of emissions credits can contribute to global reductions in greenhouse gases. But if credits remain unsold and their prices drop, it will be difficult for issuers to keep projects going.

An afforestation project in central India, which issued credits between 2012 to 2014, provides a good illustration of the difficulties. Nikkei’s analysis of satellite images of the area show increasing clearance of trees in the project area and the construction of facilities, apparently solar panels.

Project developers have indeed weathered some difficult years, but how does an unnamed project illustrate anything but Nikkei’s own lack of transparency? Verra repeatedly asked your reporters to provide their analysis so we could answer their questions, but they told us they don’t share analysis – oblivious to the irony of using the market’s transparency to deride its “opaqueness” while demonstrating no transparency themselves.

Even if the satellite images show what your reporters claim they do, such a finding is meaningless without more details because most REDD+ projects are designed to reduce deforestation – rarely to eliminate it. More confusing, the paragraph references an afforestation project but points to increasing deforestation. Of course, some REDD+ projects do include afforestation or reforestation activities, usually outside the project area to take pressure off the forest, but that doesn’t seem to be what your reporters are referencing.

An afforestation project in Uruguay meant to run for 100 years, for which carbon credits were issued in 2007 and were still trading last year, has come to a standstill, resulting in even greater deforestation. If credits backing such failed projects continue to be traded, they will undermine global decarbonization efforts.

This paragraph is meaningless – and not just because it refers to another unnamed project. Your reporters again seem to be confusing afforestation and conservation. They also ignore the fact that afforestation projects don’t generate credits until after the trees have grown, and the buffer pool covers reversals.

With forests exposed to ongoing risk of logging, experts say newer credits are preferable. According to Second Nature, a U.S. nonprofit organization working on climate change issues, “Offsets that are more than five years old are less desirable.”

But for the companies that trade them, all carbon credits are the same, regardless of when they were verified, when calculating CO2 emissions reductions. “I think many market participants see older-vintage credits as a bit stale,” Cameron Hepburn, a professor at the University of Oxford, said.

But as carbon prices usually fall by roughly half after five years, some companies tout their emissions-cutting efforts by buying older, cheaper credits. With the emissions credit market split, these cheaper credits are attracting global companies.

These paragraphs say nothing about the effectiveness of older credits but instead express an opinion about market sentiment. As your reporters previously pointed out, older forest projects struggled financially because the world took too long to recognize their importance. This, however, is a failure of the global community and not of the projects themselves.

There is legitimate debate about the efficacy of some older credits outside the forestry space, and in 2019, VCS stopped recognizing certain older renewable energy credits generated under the Kyoto Protocol’s Clean Development Mechanism (CDM), but that is not what your reporters are focusing on here.

The use of older carbon credits differs by industry. As of September 2021, Delta Air Lines was the largest buyer of credits older than five years, buying the equivalent of 7.28 million tons of CO2. That represented 45% of the U.S. airline’s offset purchases.

“Verified carbon credits for projects that are active and closely monitored are still viable, even if they are of an older vintage,” a public relations official at Delta told Nikkei.
Energy giant Shell offset 79% of its emissions with credits older than five years. Luxury fashion labels and financial institutions, among others, were also active buyers of older credits. In contrast, companies that used no credits more than five years old included The Walt Disney Company, Chanel and Goldman Sachs.

“There is growing demand for additional due diligence, and more buyers are looking to ensure they do not have negative scrutiny later,” said Bill Goldie of Plannet Zero, a subsidiary of British carbon risk consulting company Redshaw Advisors.

Credits of deteriorating quality must be weeded out to make measures against global warming more effective. Albo Climate, an Israeli data analytics company, has developed a system to measure the absorption of CO2 by forests, and to inform companies and verification organizations when their effectiveness wanes.

This paragraph begs the question by assuming that credits have “deteriorating quality,” as if they are pieces of rotten fruit. Furthermore, technologies like Albo Climate’s are constantly being incorporated into VCS methodologies, but your reporters imply that is not the case.

Some experts say there should be markets for trading only in credits guaranteed through continuous verification. “It is time to discuss how to ensure the quality of credits, how both sellers and buyers shoulder costs,” said Toshihide Arimura, a professor at Waseda University.

This paragraph makes no sense because continuous verification already exists, and the types of discussions Professor Arimura refers to have been underway for a half-century. In fact, they led to the creation of the current system.

To the first point, if a project goes five years without being verified, an amount of buffer credits equal to half of those associated with the project will be put on hold. If the project goes another five years without a verification, the remaining buffer credits will be put on hold. If a project goes 15 years without a verification, then it’s declared inactive, and all of the credits on hold will be cancelled, along with a number of buffer credits equal to all of those the project ever issued.

To the second point, the VCS grew out of discussions over how to ensure quality, and its methodologies have not only stood the test of time but are continuously updated as reality changes and science advances. Saying it’s “time to discuss this” is like saying it’s time to discuss the need for umpires in baseball and referees in football. They already exist, and the question is how to ensure they keep getting better.

It is necessary to create a mechanism to enhance the transparency of CO2 emissions reduction efforts through continual reviews, letting funds flow to high-quality credits.

Your reporters are again calling for something that already exists, as their own reporting shows. This sentence merely emphasizes the absurdity of the piece.

Third Story

Header: ‘Ghost’ carbon credits still alive despite end of forest project

This headline implies something dark and nefarious, but the story reveals nothing of the kind.

Carbon credits issued for a forest project in Belize are still registered as being active even after CO2 reduction efforts in the area have ended, a Nikkei investigation has found.

VCUs are not considered “active” or “inactive.” Your reporters are once again ignoring the fact that verified carbon units (VCUs) are decoupled from the individual project upon issuance and insured by the global buffer pool. Credits can be canceled or retired, but they never become inactive, even if the project suffers a reversal.

As your reporters reveal a few paragraphs down, the project in question is the Boden Creek Ecological Preserve (BCEP) Carbon Project, and in addition to ignoring the existence of this buffer pool, your reporters also dismissed both the project’s past accomplishments and the heroic efforts to keep it going.

Specifically, the project prevented 3,980 hectares of forest from being chopped and converted to agriculture. This is incontrovertible. If the project didn’t exist, the forest would be gone.

Your reporters are correct that the project is struggling, and there is a good chance it will miss its next verification. If that happens, half of its associated buffer credits will be put on hold – despite the fact that the entire area is still intact. Far from demonstrating the weaknesses your reporters imagine, this demonstrates the system’s resilience.

It is a matter of public record that the environmental NGO Fauna & Flora International (FFI) launched a public fundraising campaign to purchase BCEP last year, as we will see shortly. FFI succeeded in that effort, and it hopes to place the land in a trust for the benefit of the Belizean people, with carbon finance supporting long-term maintenance and conservation.

We will elaborate on this complex and challenging backstory below, but the great tragedy of this journalistic fiasco is that your reporters are pinning blame for a problem on those working to solve it.

One reason the carbon credits are still active is that a carbon-reduction projects database used by companies and other buyers is not current, leading to transactions based on faulty information. As a result, the money paid by greenhouse gas emitters to buy credits has not been used to finance practices that use forests to trap carbon.

Trees don’t appear or disappear based on entries in the project database; and the carbon credits are “active” for two reasons. First, because the project generated results, and those results still stand. Second, because those results are backed by the global buffer pool that your reporters repeatedly choose to ignore.

Furthermore, the “projects database” (actually, a registry) is not “out of date” and doesn’t “lead to transactions based on faulty information.” Indeed, the reporters are intentionally misrepresenting the role of carbon registries, which were created to serve as depositories of project documents and a means of tracing credits from their inception through to retirement. They serve that function well but are difficult to navigate.

Standard-setting body Verra, which administers the VCS, acknowledges that a growing market needs a more user-friendly registry. That’s why it purchased and consolidated two third-party registries two years ago, and it is in the process of digitizing all procedures. This will make the registry more navigable, but it’s a tedious process involving the alignment of hundreds of thousands of documents.

Verra has been open and transparent about this process, but navigability and transparency are two different things.

Your reporters are also wrong to claim that money paid “has not been used to finance practices that use forests to trap carbon.” The money paid for results that a project proponent generated by taking on tremendous financial risk. The credits are issued ex-post, meaning that the “practices that use forests to trap carbon” were already implemented when the credit was issued and eventually paid for by a buyer.

The project in question is the Boden Creek Ecological Preserve Forest Carbon Project in southern Belize. Boden Creek was designed to protect 40 million sq. meters of forests to generate offsets worth 1.4 million tons of carbon dioxide over 25 years, starting in 2005.

The database of Verra, a nonprofit organization in the U.S. that certifies carbon credits from forest preservation projects, lists Boden Creek Ecological Preserve (BCEP) — a local company — as the main operator of the project.

Nikkei examined the documents used for company certification and found that U.S. forest management company Forest Carbon Offsets replaced BCEP as the main operator by October 2017. The project was also controlled temporarily by a U.S. coal company in 2017.

This is incorrect, and the one part that’s accurate didn’t come from Nikkei Asia examining the documents but from Verra explaining the documents to them. Your reporters use the term “operator” to describe two different functions. Forest Carbon Offsets (FCO) is the project developer, meaning they provided the technical expertise, and – as we showed your reporters – they also represent the project in the registry. BCEP is the project proponent, meaning they provided the land and resources.

According to FCO, a company called Merida Natural Resources took a minority stake in Forest Carbon Offsets, while an affiliate called ERP Mineral Reserves LLC also tried to purchase BCEP. Neither of these ever controlled the project.

After the deals fell through, the owners of BCEP sold out to a North American group that intended to sell the property again to an agricultural concern. That’s when FFI initiated a fundraising campaign to purchase BCEP, making FFI the owners of the project proponent and of the land itself.

But ownership does not ensure long-term conservation without additional finance. FFI is exploring the use of carbon finance to support and expand the project, together with the Belizean government and local communities.

None of this impacts the environmental integrity of credits already issued, for reasons we have elucidated above and will further explore below.

Carbon credits were generated only for 190,000 tons of CO2 produced until 2015, with none since 2016. Reports on project activities — verified by independent organizations that monitor carbon savings — exist only through 2015, and none have surfaced for subsequent years.

The exact number is 194,009 credits, of which 59,903 – or more than 30 percent – were placed in the buffer pool that your reporters refuse to acknowledge exists. The remaining 134,106 credits were sold into the market.

Furthermore, the registry clearly and transparently shows that, contrary to what your reporters claim, the project was last verified in 2017 (albeit for the 2005-2015 period). That means it must be verified again by October of this year to avoid triggering a hold on buffer credits.

Let’s put the pieces together: if this project fails to achieve another verification by October of this year – and all indications are that it will – an amount of buffer credits equal to half of those created by the project – or about 30,000 credits – will be put on hold. This will happen despite the fact that remote sensing shows the forest is still there.

If the project isn’t verified by October 2027, an amount equal to the remaining buffer credits will be put on hold. And if it still isn’t verified by October 2032, it will be declared inactive, meaning all of the buffer credits on hold will be cancelled, along with 134,106 additional buffer credits.

Obviously, the buffer pool will also be used if the project suffers a reversal – something that has only happened once in the history of VCS.

This suggests that the U.S. successors to BCEP stopped forest conservation activities yet have continued selling credits generated in or before 2015.

This may well be the case, but it ignores the fact that the project prevented 3,980 hectares of forest from being converted to agriculture, and that those credits were decoupled from the project upon issuance and are backed by the global buffer pool.

In 2021, Fauna & Flora International, a U.K.-based conservation charity and nongovernmental organization, purchased the land covered by the carbon offset program to prevent the forests from being converted to farmland.

According to an FFI spokesperson, “The land had attracted considerable commercial interest from third parties, specifically for conversion to agriculture, namely for banana planting.”

“The ecological integrity of Boden Creek … was under threat were the land to be bought up for agriculture, so there was an urgent case to secure its future,” the person added.

This is true, and it demonstrates the challenges these organizations face. FFI is to be applauded for stepping up to save an endangered forest.

Verra has failed to update its database to reflect these changes, allowing purchases of credits based on outdated information. Verra has not responded to Nikkei’s request for comments.

This is not true. All relevant changes were reflected in the registry, and FFI’s purchase of BCEP didn’t change BCEP’s status as project proponent.

Furthermore, Verra responded to the reporter’s requests for comment but refused to make false statements about the registry.

Specifically, in the spirit of transparency, Verra voluntarily pointed your reporter to a change in project documents that we initially suspected weren’t reflected in the summary. Such errors do, unfortunately, exist, but in this case, our suspicion proved unfounded. Your reporter, however, fixated on it and pushed for us to issue a statement that the current registry lacked transparency and wasn’t “trustworthy.”

To reiterate: Verra readily concedes that the registry is difficult to navigate, and some errors created through the process of consolidating two registries into one have been found and corrected. But navigability is not transparency. The registry serves the purpose it was designed for, and independent third parties, such as Ecosystem Marketplace and Trove Research, routinely harvest its content for data analysis.

In reviewing Verra’s exchanges with the reporter, we must also concede that two early questions about the balance sheet of the company that purchased the project proponent did go unanswered. If this is what your reporters are referring to, the context shows it only happened because the questions would have required further investigation and weren’t relevant to the legitimacy of the credits.

To summarize: Verra answered the relevant questions from the first tranche of questions and asked for clarification on the reporter’s line of questioning, but the reporter then pivoted to demands for false statements about the registry. Verra provided a comment, but it wasn’t the comment the reporter wanted.

Of course, paying money to such entities as BCEP or its successors is unlikely to fight climate change. And though Fauna & Flora International has purchased the forest for the project, the charity is not eligible to receive the money paid for credits because it does not control the project itself.

Of course, this statement is ludicrous, because BCEP did prevent almost four thousand hectares of forest from being destroyed, which prevented almost 200,000 metric tonnes of carbon dioxide from being released into the atmosphere. If that doesn’t fight climate change, what does?

The sad fact is that your reporters are parroting the unfounded opinions of a few outlier activists while dismissing the preponderance of the evidence and the concurrent views of most scientific experts. Recent peer-reviewed research by Coutiño et al, for example, concluded that deforestation within VCS project areas was reduced by 47 percent compared with matched counterfactual pixels, while degradation rates were 58 percent lower.

Regarding FFI: they didn’t purchase Boden Creek until the end of 2021, and they are still exploring their options for conserving the forest. As owners of the land, they do have de facto control of the project, but they are not at this stage the registered project proponent and they have no claims to credits previously issued.

In addition to reforestation, afforestation and improved forest management, avoiding conversion to agricultural land can also generate carbon credits. These credits represent the balance between carbon expected to be stored in forests when conversion is avoided and estimated carbon sequestration under a “business-as-usual” scenario. Companies can offset their emissions by buying credits.

It’s bizarre for your reporters to introduce the concept of avoided conversion here, because the Boden Creek project was designed to prevent the conversion of forest to farm, as well as to allow the forest to recover from hurricane damage that occurred prior to the project start date. In writing about Boden Creek, your reporters have been writing about avoided conversion throughout the piece – albeit with inexplicable and confusing references to other project types.

They’re also wrong to write about carbon “sequestered” through avoided conversion, because that’s the focus of removals-based projects. Avoided conversion projects focus on avoided emissions, which is why the first two letters of the REDD+ acroynm stand for “reducing emissions.” Additional sequestration is captured in the “plus.”

This is more than mere semantics because the methodologies for quantifying the climate impacts of reduced deforestation are different from those for afforestation and reforestation. Failure to draw that distinction leads to many misunderstandings, and your reporters don’t seem to understand that.

In 2021, Japan Petroleum Exploration (JAPEX) purchased credits for 120,000 tons of carbon offsets produced by the BCEP during the 2007-2014 period. These accounted for 60% of credits BCEP issued up to 2015. A company affiliated with Mitsubishi Corp. brokered the deal.

Here your reporters are again refusing to acknowledge the existence of the buffer pool. As we saw a few paragraphs earlier, more than 30 percent of all this project’s credits went into the buffer pool, so 120,000 represents 89 percent of the credits that made it to the market.

JAPEX used the credits in its business of importing liquefied natural gas to achieve carbon neutrality for one vessel worth of LNG products sent to Japan. The company says the credits purchased were certified by Verra. Mitsubishi says the broker it used was reliable.

While using old credits to offset current carbon emissions does not represent a violation of any rules, it does highlight the lack of transparency offered buyers to evaluate the quality of such carbon offset projects. Private credits are generally based on vague calculations, and projects are not frequently monitored by certification entities.

This is a non-sequitur: there is no lack of transparency except on your reporters’ own part, and even if there were such a lack on the market’s part, it’s illogical to state that the vintage of a purchase highlights it.

Also, there is nothing “vague” about rescuing a forest slated for conversion to a fruit farm, which is documented in the project description document as well as the validation and verification reports from independent auditors.

VCS forest carbon projects utilize time-tested land-use change models common to the field of environmental impact analysis. These models were adapted into formal methodologies through extensive peer review and public consultation involving scores of scientists and stakeholders.

The discovery of outdated information published by a certification organization points to a major lapse of oversight. Buyers of credits issued for the Belize project were not aware that the main project operator had changed.

There was no “discovery of outdated information” because there is no outdated information to discover. Your reporters self-servingly use the term “discovery” for something we pointed out to one of them. In a truly bizarre exchange, after Verra transparently pointed out a confusing entry in the registry, she demanded we issue a statement that the registry lacked transparency.

Carbon Market Watch, a Belgium-based not-for-profit organization that monitors carbon markets, said purchasing carbon credits issued for a now-defunct project does not serve the original purpose, which is supposed to use money paid for the credits to offset CO2 emissions.

This sentence implies the BCEP project is defunct, which it is not, and it again ignores the existence of a global buffer pool.

Furthermore, carbon finance involves payments for results, and there is nothing dishonest or misleading about making those payments after results have been achieved. Indeed, that is a strength of these markets.

Gilles Dufrasne, policy officer of the organization, said that “attempting to compensate any greenhouse gas emissions with carbon credits from over a decade ago is inappropriate. When this is used to market a fossil fuel as ‘carbon neutral,’ it is borderline dishonest and clearly misleading.”

That’s CMW’s opinion, but the debate over what constitutes carbon neutrality is a global one taking place in forums such as the Science-Based Targets Initiative (SBTi), The Voluntary Carbon Markets Integrity Initiative (VCMI) and the International Organization for Standardization (ISO), among others. 

Some experts say the project in Belize is just the tip of the iceberg. Carbon offset programs in which forests were cut after credits were issued have been found in India and Uruguay. These projects are believed to have since been dissolved.

In order to ensure that funds flow into valid projects, project transparency is crucial, as is independent oversight.

It’s ironic that a story purportedly about “ghost” credits relies on ghost experts and ghost projects that suffered ghost reversals.

It’s possible that deforestation happened in project areas, but that’s because avoided conversion projects aren’t omnipotent. They are designed to reduce deforestation, but they are rarely able to end it. Given the multiple errors your reporters have made in trying to describe the projects they do name, there is no reason to believe there is any validity regarding projects they don’t name.

Rachel Kyte, dean of Fletcher School at Tufts University and an advocate of private-sector rules for carbon offsets, advocates using blockchain technology for oversight.

“We need to try to create an ecosystem where it’s not possible for a company to sell something that they shouldn’t be selling, or for a company to acquire something that they shouldn’t be acquiring,” she said.

This quote comes out of no place and validates nothing. Verra recently launched a public consultation on the role of blockchain technology in carbon markets, but that has nothing to do with the issues your reporters failed to understand in these two pieces.


The great tragedy of your reporting is that we need informed critiques from diverse stakeholders to drive the process forward. Lies, half-truths, and innuendo do not constitute informed critiques.

Carbon finance is complicated, and harried reporters on tight deadlines do make mistakes. But these stories didn’t come from a single harried reporter on a tight deadline. They came from a team of reporters with months of time, and none of those reporters appear to have been charged with fact-checking.

Nikkei Asia should conduct an internal review to verify the veracity of our points and identify the procedural failures that led to this fiasco and take appropriate steps to minimize the damage it has created.