Recent discoveries about erroneous carbon credit calculations have fueled public doubt about the voluntary carbon marketplace (VCM), since understanding the carbon offset marketplace can be confusing. Numerous organizations are facing newfound scrutiny, and the popular company Terrapass, has not been spared with many wondering, “Is Terrapass legit?”
However, a closer look at the company’s standards and practices clarifies that it’s one of the most trustworthy climate-focused orgs in the world.
So, what exactly is Terrapass’s place in the carbon offset marketplace?
Read on to find out…
Terrapass’s Climate-Friendly Reputation
Terrapass was conceived by Dr. Karl Ulrich and a team of 41 students from the University of Pennsylvania. The organization began in October 2004, with the central aim of helping people reduce their cars’ climate impact. In the first year alone, Terrapass gained more than 2,400 members and reduced 36 million pounds of CO2.1
The company’s swift success fueled its growth into combatting other greenhouse gas (GHG) -emitting sectors like air travel and general energy consumption. In the following years, Terrapass grew into a major resource of carbon credits, eventually helping more than 1,000 individuals and institutions mitigate their climate impact.
Terrapass is one of many US carbon offset companies that have been under increasing scrutiny in recent months. The skepticism isn’t related to anything Terrapass has done particularly, but growing public uncertainty about the carbon marketplace.
Understanding the Voluntary Carbon Marketplace
The VCM is a voluntary system, meaning that there is little oversight and regulation, since there are no designated ruling bodies agreeing to one set of standards. Because of this, some programs, such as The Nature Conservancy, have come under fire because they were protecting trees that weren’t actually in danger of deforestation. It is these projects that lack true results that are causing doubts on all the VCM as a whole, even though this can be a simple issue to avoid.
Doubts About the Carbon Marketplace
The carbon marketplace is one of the most powerful tools we have to mitigate climate change effects. However, it does have some drawbacks. The most notable concerns about carbon offset projects that companies like Terrapass support include their verifiability, how long the advantages last, leakage, and the selling of “empty” carbon credits.2
“Carbon leakage” refers to a company simply displacing their carbon dioxide instead of removing or reducing it.3 For example, imagine a corporation based in the United States. However, they also have locations or partner with businesses, such as manufacturing plants, overseas.
The US-based corporation might reduce the CO2 emissions of its primary location to comply with American climate policies, but ramps up operations overseas. This causes a net increase in GHG emissions, but the company appears to have lowered their carbon output. In this case, it merely “leaked” carbon dioxide to foreign locations.
Any organization enrolled in a carbon offset program with genuine climate-friendly goals would try to prevent this. If the issue did arise, the fault would lie with that individual business, not a company like Terrapass. This contrasts with the potential sale of “empty” credits.
The concept of “empty” credits refers to a program’s lack of additionality. “Additionality” means that the offset project prevents a certain amount of carbon dioxide from entering the atmosphere. If a project does not have additionality, it means that the carbon dioxide would have been removed from the atmosphere one way or another. In this case, the project isn’t making a difference since the carbon dioxide can and will be offset without it.
Since the project has no substantial value, this renders the sold carbon credits useless. So, they become known as “empty” credits.
This is certainly a valid concern to consider as you’re shopping for carbon credits, especially since the recent reports revealing devastating truths about the carbon marketplace’s dark side.
Recent Report Unveils the Truth of Empty Credits: Marketplace Overestimation
In April of this year, Carbon Plan published a scathing report showing that forestry offsets had been severely over-credited. Specifically, California over-credited its forest carbon offsets program (the largest in the world, valued at $2 billion) by a shocking 29.4%.4
The report’s authors state, “Our analysis of crediting errors demonstrates that a large fraction of the credits in the program do not reflect real climate benefits.”
This means that the state overestimated its offsets by a staggering 30 million tCO2e. This equates to nearly one-quarter of the program’s worth: about $410 million dollars.
The researchers investigated 102 million upfront IFM (improved forest management) credits, representing approximately two-thirds of California’s entire offset program. IFM is integral to the state’s carbon-sequestering activity. This practice involves increasing forests’ carbon dioxide storage capacity by altering forest management operations, such as the frequency of timber harvests.
By selling them upfront, California officials severely bloated their numbers. The baseline calculations consider the average amount of carbon dioxide that would remain after a typical harvest, called “common practice,” guided by other forests’ carbon stock, or the capacity for capturing carbon dioxide, in the same region.5
Then, the analysts find the difference between the forest’s current and future carbon stocks (after implementing IFM). This difference in value tells officials the number of carbon credits the buyer receives upfront.
It turns out that California made some gross generalizations about regional forests’ carbon stocks. This led the state to set the average stock too low, causing inflated carbon credit estimations.
The report’s authors stated, “We found evidence that the vast majority of projects were over-credited: for these projects, common practice values are systematically low because they reflect averages based on dissimilar species types.”
Unfortunately, it stands to reason that California’s cap-and-trade system isn’t the only source of potentially overestimated forestry credits. Because of this, the report has larger implications for the carbon marketplace at large.
The researchers warn, “Rather than improve forest management to store additional carbon dioxide, ecological and statistical flaws in California’s offsets program create incentives to generate credits that do not reflect real climate benefits.”
Impacting the Entire Carbon Offset Marketplace
The implications go beyond the state’s borders, affecting many well-known organizations in the offsets industry.
Among them, Terrapass has faced extensive public scrutiny. The company supports three different forestry programs, one of which is in Humboldt, CA.
However, the state’s analytical blunder isn’t representative of Terrapass’s legitimacy or suspected lack thereof. As a buyer, you have many tools at your disposal to ensure the verifiability of your supported carbon offset programs and it’s easy to check the emissions you create by using an ecological footprint calculator.
Is Terrapass Legit?
Terrapass was conceived by Dr. Karl Ulrich and a team of 41 students from the University of Pennsylvania. The organization began in October 2004, with the central aim of helping people reduce their cars’ climate impact. In the first year alone, Terrapass gained more than 2,400 members and reduced 36 million pounds of CO2.1
The company’s swift success fueled its growth into combatting other greenhouse gas (GHG) -emitting sectors like air travel and general energy consumption. In the following years, Terrapass grew into a major resource of carbon credits, eventually helping more than 1,000 individuals and institutions mitigate their climate impact.
Terrapass is one of many US carbon offset organizations that have been under increasing scrutiny in recent months. The skepticism isn’t related to anything Terrapass has done particularly, but growing public uncertainty about the carbon marketplace.
Terrapass is an impressively transparent organization within the carbon offset marketplace. The primary way that any buyer can verify their purchased offsets is by ensuring the company uses a third-party verifier, or a “validation and verification body” (VVB). You can find a list of approved VVBs from several authorities like the American Carbon Registry and Verra.6
At present, Terrapass adheres to the Verified Carbon Standard (VCS), developed by Verra and Climate Action Reserve (CAR). The company’s forestry projects fall under the authority of the VCS, among others, while its landfill and livestock projects are in accordance with the CAR. Additionally, Terrapass uses an accredited third party to verify the generated carbon credits to ensure objectivity.
- Independent verification prevents empty credits from occurring by confirming correct baseline calculations, confirming GHG reductions or removals, and more. Since the VVB is a separate entity, there is no incentive to misrepresent a business’s mitigation activity.
- As an added assurance, buyers can visit the VCS Project Database Website to verify Terrapass’s work for themselves. Offsets that are verified using the VCS standard will show up in that database, so you can check on the site to see Terrapass’s submittals and project listings.
- Terrapass also maintains a publicly accessible portfolio audit, fully verified by an independent accountant. Every year, the company retires its offsets, which functions as another defense against inflating carbon credit totals.7
Using Verified Forestry Carbon Offsets to Heal the Earth
Using a multi-layered fact-checking and verification process is essential to the success of afforestation projects. According to Thomas Crowther, a professor of environmental systems science at Eidgenössische Technische Hochschule Zürich, reforestation is “the top climate change solution in terms of carbon dioxide storage potential.”8
Plus, forestry carbon offsets are crucial to wildlife’s wellbeing. Trees are an integral part of many animals’ livelihood, supplying food and shelter most importantly. Yet, as of 2020, the world lost 3.92 Gha of tree cover, representing 30% of Earth’s land cover. In 2020 alone, the 25.8 Mha (mega hectares) of tree cover perished.9
(A Gha is a global hectare, meaning the “biologically productive hectare” with the world’s average biological productivity per year.10)
Restoring these forests is crucial to preserving life as we know it. For humans’ and wildlife’s sake, verifying forestry carbon offsets is a non-negotiable step. The verification process isn’t just for confirming a project’s validity. In fact, some planting projects are clearly legitimate without them, because they have government contracts or otherwise.
However, this verification process does more than provide a label of approval.
It provides invaluable data that organizations can use to improve their practices, and see how a project can do better in its planting, reporting, and monitoring of operations. All of this makes it easier to offset your carbon footprint, and aids in the pursuit of furthering the mission to heal the planet and save animals.
Organizations like Terrapass are working to combat public doubt. Even as it supports forestry projects in the state of California, Terrapass exceeds quality expectations in the carbon offset marketplace, providing the highest level of transparency and efficiency possible in all its available programs.
For the world to win in the fight against climate change, the best carbon offset providers like Terrapass have the potential to be a strong contender with tree planting offset options, as long as they remain transparent and provide real, positive ecological change that can be measured in the carbon offset marketplace.
References
1Terrapass. (2021, June 15). About Terrapass | The Terrapass story and who we are. Terrapass. Retrieved July 17, 2021, from: <https://www.Terrapass.com/about-us/about-us-Terrapass-difference>
2Gorte, R. W., & Ramseur, J. L. (2008). Forest carbon markets: Potential and drawbacks (RL34560). Congressional Research Service. Retrieved July 17, 2021, from: <https://fas.org/sgp/crs/misc/RL34560.pdf>
3Carbon Market Watch. (2014, August 29). Carbon leakage. Retrieved July 17, 2021, from: <https://carbonmarketwatch.org/2014/08/29/carbon-leakage/>
4G Badgley, J Freeman, J Hamman, B Haya, A T Trugman, W R L Anderegg, D Cullenward (2021). “Systematic over-crediting of forest offsets.” CarbonPlan. Retrieved July 17, 2021, from: <https://carbonplan.org/research/forest-offsets-explainer>
5United States Department of Agriculture Forest Service. (n.d.). Taking stock of carbon. Forest Atlas. Retrieved July 17, 2021, from: <https://forest-atlas.fs.fed.us/benefits-carbon-stocks.html>
6Terrapass. (n.d.). Carbon offset transparency | Project standards. Retrieved July 17, 2021, from: <https://www.Terrapass.com/standards-2>
7Terrapass. (n.d.). Portfolio audit. Retrieved July 17, 2021, from: <https://www.terrapass.com/portfolio-audits>
8Irfan, U. (2019, July 5). Restoring forests may be one of our most powerful weapons in fighting climate change. Vox. Retrieved July 17, 2021, from: <https://www.vox.com/2019/7/4/20681331/climate-change-solutions-trees-deforestation-reforestation>
9Global Forest Watch. (n.d.). Global deforestation rates & statistics by country | GFW. Forest Monitoring, Land Use & Deforestation Trends | Global Forest Watch. Retrieved July 16, 2021, from <https://www.globalforestwatch.org/dashboards/global/?category=summary&dashboard>
10Global Footprint Network. (n.d.). Glossary. Retrieved July 17, 2021, from: <https://www.footprintnetwork.org/resources/glossary/>