A vacuum of evidence exists to prove the claims of market actors that carbon credits purchased on the voluntary carbon market accelerate corporate internal decarbonisation. An examination of reality shows that market confidence may be driven by noise, rather than a clear signal.
This policy briefing demonstrates that data limitations and potential biases caused by interdependent or reverse-causal relationships make it practically impossible to determine whether carbon credit use actually causes a change in the internal emission reduction efforts of a company.
As a result, the prevailing narrative – that carbon credits accelerate emissions cuts – must be considered unsubstantiated. Existing studies are limited by potentially confounding factors (e.g. certain company characteristics that drive both credit use and decarbonisation), sample bias, poor data quality, and reverse causality (whereby companies that are already decarbonising may buy fewer credits). There is anecdotal evidence that overreliance on credits can divert resources away from actions that generate genuine internal mitigation, such as potentially slowing progress through investment and target effects.
Consequently, companies using the unfounded causality narrative must abandon this approach, refocus on deep internal emission reductions, and treat carbon credits only as a peripheral, transparent contribution mechanism.
Market actors must cease public claims that carbon credit purchases cause accelerated decarbonisation and should frame credits only as complementary climate contributions, rather than as an accelerator for internal abatement. The core challenge of reducing emissions at source must become the goal of corporate climate action, highlighting the need for sector-wide transformation rather than reliance on offsetting.
Corporate climate standard bodies such as the Science Based Targets initiative (SBTi), the International Organization for Standardization (ISO) and the Greenhouse Gas Protocol should explicitly reflect in their standards work that no proven link exists between carbon credit use and internal emission reductions. Not only will this ensure that standards do not allow credits to count toward physical greenhouse gas inventories and interim emission reduction targets, but also maintain a clear division between credit use and in-house mitigation.
Regulators and policymakers should deter from embedding unverified causal assertions in legislation or guidance, demand transparent disclosure of credit purchases from buyers and maintain enforcement of separate accounting requirements for internal mitigation versus carbon credit use.
These steps are all essential to align corporate behaviour with the Paris Agreement’s 1.5°C pathway and to prevent the continued diversion of attention away from the urgent task of cutting emissions at source.
