Carbon offsets: Using the green cloak of 'certification' to sell

Marketing a lumber plantation in Panama, one company uses certified carbon offset claims as a green lure.

This four-month multimedia investigation by reporters on five continents is a joint project of the Monitor and the New England Center for Investigative Reporting. It was funded, in part, by The Deer Creek Foundation.  

It's an alluring offer: Plant trees in Panama. Create carbon offsets to help the environment. Then cut the trees and make lots of money.

That is the pitch of SilvaTree.com, a green-soaked website adorned with pictures of flourishing trees and children blowing dandelions.

Buy 660 trees in Panama for $32,500, the company promises, and you will get back at least $145,200 – a "guaranteed return" of 15 percent each year for two decades.

It is a "certified carbon offset project," the company's online promotion assures.

Except that it is not. Despite sales claims, the company says it's only in the process of applying for certification. But it claims to be in the process of applying for approval by the Voluntary Carbon Standard (VCS), which would – if the approval comes – offer buyers some assurance of the offset validity when the trees mature. The former deputy environmental minister of Panama leading the company's certification process, Eduardo Reyes, told the Monitor in a February interview in Panama City there's no guarantee that it will eventually be certified.

Using carbon offset certification and climate change as part of marketing and public relations aimed at investors hints at a larger problem in a burgeoning market with little oversight. And it concerns those in the industry who worry that inaccuracies at best, or fraud at worst, could blemish the reputation of the entire industry.

David Antonioli, chief executive officer of the VCS Association, which is based in Washington, D.C., says the organization has contacted one company that has claimed association with VCS for projects in Indonesia, China, and India yet was not registered with the monitoring body. "It's not too common," he says, but adds, "We are starting to hear this.… We're starting to keep track of it."

The market's integrity is at stake, he says.

At Silva Tree, officials and employees contradict one another about the status of VCS certification of the project.

A salesman who calls – from London – a few hours after one downloads a brochure from the Silva Tree website, says the carbon offsets generated by these trees are "absolutely" approved by the certifier (VCS): "We have it on our website."

They do. But, conceded Keren Katz, director of Silva Tree's London office in a February phone interview, "It is not VCS certified. If it's [in our brochure] it shouldn't be." In April the claims remained in their brochure and phone sales pitches were still claiming VCS verification.

It's not the only conflicting information the company offers. A salesman this month asserted that more than 350 hectares have been planted with tens of thousands of trees. But the company only owns 200 hectares so far, says Martin Rivera, who acquires real estate for Silva Tree. And a Monitor visit to the site in February found just 10 hectares had been planted, with 8,000 seedlings, since the October project launch. Herminio Rodriguez, forestry management contractor for Silva Tree, said 1,200 seedlings died – possibly because they were planted in the dry season, not considered the time to cultivate in Panama.

Company officials also contradict one another about the way carbon offsets figure in the project. The brochure and salesmen market it as a carbon offset project, but leave vague who actually receives the carbon credits and profit for sales of the credits.

"In Panama, it is a double benefit: timber and carbon credits.... There's double income, on his/her plot," says Maurice Sjerps, Silva Tree manager in Latin America.

But Ms. Katz says that investors don't receive carbon credits; they would receive profits from the sale of the timber. Credits wouldn't be sold until VCS certification is achieved, she says, adding that the company would use the profits to improve the community near the project.

Some environmentalists criticize timber investment projects that offer carbon offsets because trees sequestering carbon are eventually cut. But Mr. Antonioli says that such projects can be valid, and one is already in the VCS database. "It may seem counterintuitive, but it could work. You can plant trees where no trees were there before."

That's what Silva Tree says it's doing – growing trees on fields of degraded farmland.

But questions and contradictions might not be apparent to any but the savviest investors if consumers believe the company's claims that it is VCS certified, a cloak of legitimacy.

And, say some environmentalists, this is one of the main problems in the voluntary market. "There is no monitoring; they are monitoring themselves," says Ricardo Carrere, the head of the Uruguay-based World Rainforest Movement.

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6. Australia leads the pursuit of carbon offset scams

[Editor's note: The summary on this story was changed slightly for greater clarity and accuracy.]

This article was written and reported by Doug Struck of the New England Center for Investigative Reporting, with contributions from reporters Ben Arnoldy in India, Sara Miller Llana in Panama, Ilene R. Prusher in Israel, Kathy Marks in Australia, and Katy Jordan and Tyler Maltbie in Boston.