The weak link

The document challenges the narrative that carbon credits drive corporate climate ambition, asserting that existing studies showing a correlation between credit use and decarbonisation suffer from methodological flaws, including sample bias and confounding factors. It highlights risks such as the 'investment effect' and 'target effect,' where credits compete with or substitute for internal abatement. The brief recommends that companies, regulators, and standard setters treat carbon credits only as complementary contributions (Beyond Value Chain Mitigation) and maintain a strict firewall between credit use and internal emission reduction targets.

• There is a lack of evidence to prove that carbon credits purchased on the voluntary carbon market cause companies to accelerate their internal decarbonisation efforts; existing claims of such a link are considered unsubstantiated.
• Studies suggesting a link between carbon credit use and decarbonisation are limited by methodological issues, such as the failure to account for confounding factors (e.g., company size or external pressure), sample bias, poor data quality, and reverse causality.
• Carbon credit use may negatively impact internal decarbonisation through two pathways: the 'investment effect,' where funds for credits compete with budgets for internal cuts, and the 'target effect,' where cheap credits are used as low-cost substitutes for structural emission reductions.
• Qualitative evidence of the 'investment effect' was found in cases involving Delta Airlines and easyJet, while the 'target effect' was observed among oil and gas companies including Shell, Inpex, and Eni.
• The document asserts that pure tonne-for-tonne offsetting is a zero-sum game that does not decrease global emissions and may provide a 'smokescreen' for continued fossil fuel reliance.
• To be credible, corporate climate strategies must prioritise deep internal reductions and treat carbon credits strictly as complements within a Beyond Value Chain Mitigation (BVCM) approach, with a clear separation from internal abatement targets.

APA

Faecks, B., & Crook, J. (2025). The weak link. Carbon Market Watch. https://carbonmarketwatch.org/wp-content/uploads/2025/11/2025_12_The_weak_link.pdf

Chicago

Faecks, Benja, and Jonathan Crook. The weak link. Carbon Market Watch, 2025. https://carbonmarketwatch.org/wp-content/uploads/2025/11/2025_12_The_weak_link.pdf.

Wikipedia

{{cite report |last1=Faecks |first1=Benja |last2=Crook |first2=Jonathan |title=The weak link |publisher=Carbon Market Watch |date=November 2025 |url=https://carbonmarketwatch.org/wp-content/uploads/2025/11/2025_12_The_weak_link.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{faecks2025weak, author = {Faecks, Benja and Crook, Jonathan}, title = {{The weak link}}, institution = {Carbon Market Watch}, year = {2025}, month = nov, url = {https://carbonmarketwatch.org/wp-content/uploads/2025/11/2025_12_The_weak_link.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }