Global carbon offset sector under scrutiny

The Northern Kenya Rangelands Carbon Project (NKRCP) stretches for thousands of miles across the country's vast and often-parched grasslands.  

It has won accolades at a UN Climate Summit, received support from the EU Commission and attracted the investment of tech firms, banks and mining financiers. But according to a recent ruling from Kenya's High Court, one of the biggest conservancies involved in the project has no basis in law.  

Self-described as "the world's largest soil-carbon offset project," the NKRCP promised to transform landscapes and livelihoods by reducing overgrazing from livestock.  

Allowing the growth of more grass on the ground would mean less CO2 in the atmosphere, proponents promised. Companies like tech titan Meta, streaming service Netflix, Germany's Beiersdorf cosmetics giant and others were told they could help offset their businesses' carbon output by paying to sequester greenhouse gases on the African savannah.  

But for many of the impoverished Indigenous pastoralists who call northern Kenya home, restrictive grazing rules pose a threat to their semi-nomadic livelihoods. Residents have warned of fences and armed patrols alienating herders from their lands, and complained of opaque management processes that excluded them from decision-making.   

Now, a new court ruling has found that the initiator of the carbon project — the Kenya-based Northern Rangelands Trust (NRT) — was operating illegally, establishing 'conservancies' without due public participation.  

What was the lawsuit all about? 

In 2021, 165 residents of community lands in northern Kenya's Isiolo County filed a case alleging that the NRT had established conservancies without their consent and was using armed rangers as "a private army for quelling any opposition."  

Their suit cited cases of violent killings and enforced disappearances in the years since the conservancy was established and argued that the deployment of weapon- carrying rangers led to the proliferation of small arms among communities trying to defend themselves, in a region already fraught with persistent ethnic conflict.

In last month's ruling, Kenya's High Court declared that the NRT's establishment of two conservancies on community land was unconstitutional and ordered the NRT to cease its operations on the area in question.  

Lawyer Innocent Makaka, who served as lead counsel for the petitioners, called the ruling extensive and well reasoned. 

"As members who own the property, they are the ones who should be consulted first," he told DW.  

The NRT has requested a stay of execution, while judges consider their request for an appeal. Its denial could have major ramifications for the organization's flagship carbon project.  

The land implicated in the lawsuit includes roughly a fifth of the project's 4.7 million acres. 

The NRT’s lawyers described the organization as "dissatisfied with the whole judgement," claiming the court's orders had "halted ongoing legitimate conservation efforts." 

Human rights issues within the carbon offset sector 

Human rights concerns around large, nature-based carbon offset projects in the developing world are drawing attention that is impacting investor behavior. 

A recent report from Ecosystem Marketplace, a leading analyst of economic trends in the sector, cites a 61% year-on-year decline in the total value of the voluntary carbon market, pointing to "media scrutiny" over the governance of carbon projects as one reason for the decline.  

Last year, Human Rights Watch reported that an anti-deforestation project in Cambodia resulted in forced evictions and lost livelihoods for members of the Indigenous Chong community. In Zimbabwe, investigations into the massive forestry-based Kariba Project revealed bogus calculations and questionable distribution of benefits to residents.  

And elsewhere in Kenya, the Kasigau Corridor project, which covers 200,000 hectares of dryland forest rich in wildlife, was investigated amid widespread accusations of sexual abuse, harassment and exploitation by administrators. 

"Unfortunately, this NRT disaster is far from an isolated problem," Caroline Pearce — executive director of Survival International, an international human rights NGO — said in response to last month's ruling in Kenya.  

"Too many of these carbons offset schemes follow the same outdated model as traditional 'fortress' conservation — claiming to 'protect' land while trampling over the rights of the Indigenous owners of it and making handsome profits in the process." 

Who's watching the watchers? 

Each of these projects was validated by Verra, the world's leading verifier of voluntary carbon credits. The outfit has rules requiring nature-based projects to obtain the "free, prior, informed consent" of residents.  

After early reports emerged in 2023 about the lack of public participation in the establishment of the NKRCP, Verra suspended its validation of the project's credits, before ultimately reissuing them following an eight-month investigation.  

"Program requirements mandate that projects adhere to robust safeguards," Verra told DW after the ruling. "If there is evidence that these requirements were not met, Verra initiates a review process." 

That process itself has received considerable criticism. Verra’s 2023 review of the NKRCP was denounced as a "shocking whitewash" by Survival International.  

Earlier that year, Verra committed to replacing its entire methodology for assessing rainforest protection programs after a nine-month investigation by German and UK press suggested that more than 90% of the organization's rainforest-based offset credits did not represent genuine reductions in atmospheric CO2.  

New rules are expected to take effect in July, but critics continue to question whether Verra remains the best-suited steward for a global carbon offset sector that, in 2021, was worth close to €2 billion ($2.1 billion). 

Edited by: Tamsin Walker, Jennifer Collins and Holly Young