Carbon Credit Markets May Undermine Climate Action and Human Rights, UN Expert Warns

Morgera said research, court decisions and communities’ experiences show that carbon markets encourage low-quality credits, over-crediting and greenwashing, delaying emissions reductions.

Countries' reliance on carbon credits may conflict with their international obligations on climate change and human rights, according to a new report by UN Special Rapporteur Elisa Morgera. The expert called for an urgent reassessment of these mechanisms, questioning whether international carbon credit markets deliver the emissions reductions needed to protect people and the environment. Her warning challenges an approach used by the vast majority of countries, with evidence raising serious doubts about its contribution to climate mitigation.

Morgera said research, court decisions and communities' experiences show that carbon markets encourage low-quality credits, over-crediting and greenwashing, delaying emissions reductions. These concerns extend beyond the performance of individual projects to the incentives built into the markets themselves. Where carbon markets contribute to increased greenhouse gas emissions, she warned, they harm everyone's right to a healthy environment, including the rights of children and future generations.

The report identifies widely documented harm to Indigenous Peoples, peasants and rural women as evidence of systemic problems requiring scrutiny of market structures and incentives. Morgera said communities and countries least responsible for climate change carry much of the burden, with most economic benefits going to states and businesses most responsible for it. She urged governments to examine whether their use or approval of carbon credits protects the climate system, the environment and human rights.

Communities bear costs as major polluters benefit

Morgera said the economic actors benefiting most from international carbon credit markets include those with a vested interest in maintaining a fossil fuel-based economy, including big technology companies. The distribution of benefits and harms raises questions about mechanisms that place burdens on communities already facing unequal exposure to climate damage. The report argues that addressing these outcomes requires identifying structural flaws in market design, beyond treating abuses as isolated failures in project implementation.

Warnings over profits, data centres and artificial intelligence

The report's findings come against calls by the UN Secretary-General for polluters to pay for climate harm instead of continuing to make exorbitant profits from it. Morgera cited the UN climate convention chief's call to prevent climate harm from the unchecked growth of data centres and artificial intelligence. She said international cooperation, including carbon credits, must not assist or benefit actors causing climate harm, particularly those involved in climate disinformation and obstruction.

Governments urged to reassess credits under international law

Technical reforms being discussed under the Paris Agreement may be insufficient to resolve the systemic problems identified in the report. Morgera called for an urgent review of carbon credits at international and domestic levels in accordance with the International Court of Justice's advisory opinion on states' climate obligations. She said states' reliance on, or authorisation of, carbon credit mechanisms is inconsistent with international law where those mechanisms foreseeably fail to protect the climate system, the environment and human rights.