The SBTi Report and the Future of Carbon Credits
Shifting the focus from carbon offsetting to genuine climate solutions: how a new era of standards could drive deeper, more inclusive action.
The carbon credit market is entering a period of correction. The Science Based Targets initiative has raised concerns that many credits fail to deliver real reductions, particularly those tied to older methodologies. The message is clear. Offsets cannot carry the weight of climate strategy on their own.
This shift deserves more than anxiety about market confidence. It exposes a deeper truth about climate accounting. A system built on aggregated claims and retrospective audits cannot reliably capture what is happening on the ground. It creates perverse incentives, hides uncertainty and encourages companies to outsource responsibility rather than reduce their own impact.
The SBTi report challenges the assumption that a tonne is a tonne regardless of origin. It reminds us that context matters. Ecological dynamics, community participation, permanence, land pressures and the actual behaviour of a project over time cannot be collapsed into a single tradable unit without loss of meaning. When that loss becomes large enough, the integrity of the entire market erodes.
There is a broader point here. The most promising climate progress is happening in places and at scales that do not map neatly to the legacy offset model. Small, local interventions often produce clearer, more durable outcomes than large, paperwork-heavy projects. They also expose the practical limits of trying to manage climate action through a narrow range of crediting frameworks that were designed for industrial actors.
The market now faces a choice. It can continue searching for the perfect credit, fine-tuning methodologies in the hope of solving structural uncertainty. Or it can widen its focus and support a more diverse ecosystem of climate action that values reduction, adaptation, ecological repair and community resilience, even when those outcomes do not fit neatly into existing credit classes.
The need for strong methodologies does not disappear. It becomes more important. Rigour should move closer to the point of action rather than sit at the end of a long chain of assumptions. Measurement should reflect real materials, real behaviour and real environments, not idealised models. Integrity improves when we observe more and assume less.
The SBTi report is not simply a judgement on the past. It is a signal that the market must evolve. Companies will need to focus on direct reductions as their foundation and use credits with care, treating them as complementary rather than compensatory. Policymakers will need to support verification frameworks that reward practical, demonstrable work rather than theoretical baselines. And practitioners should feel encouraged to explore solutions that operate at human scale, where evidence is easier to generate and trust is easier to earn.
Carbon credits will remain part of the landscape, but they cannot be the centre of it. The climate crisis is too complex and too unevenly distributed for any single mechanism to carry the load. The next phase will belong to approaches that recognise this complexity and respond with clarity, measurement and local intelligence.
The question is not whether the market survives. It is whether it adapts to the reality unfolding around it.
