Carbon markets promise quick, easy climate “solutions,” but an ActionAid USA report shows they routinely fail to cut emissions. Instead, they fuel corporate greenwashing, land grabs, and human-rights abuses across the Global South. Developed with our partners in Liberia and Kenya, the report draws on Kenya’s long history of offset projects and Liberia’s emerging deals (notably with Blue Carbon) to expose patterns of violence, livelihood loss, and communities selling their future out of urgent need for revenue. It’s time to demand robust safeguards—and real, grant-based climate finance that truly protects people and the planet.
Key Findings:
- Carbon markets don’t reduce emissions: Up to 90% of rainforest offset credits sold by Verra, a leading carbon registry, were “phantom credits”—worthless in terms of actual climate benefit.
- The math doesn’t add up: Most offset projects fail to deliver even 25% of their promised emissions reductions.
- Communities are being harmed: Over 100 documented cases in five years show carbon market projects linked to violence, displacement, and rights violations, especially impacting Indigenous peoples.
- Big profits, small returns for communities: In Kenya, only 2% of total project revenue reaches community conservancies, while middlemen, certifiers, and foreign companies pocket the rest.
- The accountability gap is growing: Host communities may end up liable for failed offsets, without ever consenting to the risks in the first place.
ActionAid is calling for:
- Ensure tenure rights to land are preserved: This is possibly the most critical demand, as land grabs are a serious risk to communities given the financial incentives at play. Communities should not agree, under any circumstances, to give up land tenure to outside parties, as the risk to food security and economic livelihoods is too great.
- Ensure transparency in negotiations and meaningful community consultations regarding any major agreements: Many of the most damaging carbon market deals have occurred without meaningful input or even awareness from affected communities. Negotiations should be transparent and inclusive, with meaningful and widespread consultations held with the affected communities from the outset.
- Do not accept liability for failed carbon projects: Host communities should not accept any liability for reversals or other failures that result in the credits being declared worthless, or “junk”. Host liability could leave communities with a very expensive bill for a reversal that is completely out of their control.
- Avoid “middle men” as much as possible: Any actual financial benefits from carbon market projects should be kept as close to the community as possible, which generally means avoiding companies that seek to sell on behalf of the community.
- Accessible and effective grievance mechanisms must be in place: Given the history of carbon market projects in practice, some form of harm is effectively inevitable, and there must be a redress mechanism in place to address it.
- No offsets: Any carbon credits sold should be bought as “contributions” to climate action, rather than being bought to offset ongoing emissions, and allowing the planet’s biggest polluters to falsely claim that they are “carbon neutral”.
- Date published: June 2025
- Number of pages: 22