Beyond the Headlines: A Constructive Response to Criticism of Validation and Verification in the VCM

A recent paper published by the University of Pennsylvania Law School, “Third-Party Auditing Cannot Guarantee Carbon Offset Credibility,” criticizes the voluntary carbon market (VCM) and the role of auditors within it.

Verra welcomes scrutiny: it’s essential in any system that seeks to deliver real climate impact. But scrutiny must also be grounded in fairness and rigor, and unfortunately, this paper falls short on both counts.

The paper references 95 Verra-certified projects that were later rejected or suspended, implying systemic failure in the validation/verification body (VVB) process. However, a closer look reveals how problematic that conclusion is.

As the authors themselves note, they selected 95 projects they “knew overstated credits” (out of the 2,485 registered Verra projects). However, rather than conducting a rigorous, independent review, the authors unquestioningly rely on the research and conclusions of other studies and news articles and also appear to have worked backward from a predetermined conclusion.

The authors’ findings are not substantiated by the sources they cite and are therefore riddled with confounding factors, requiring a nuanced analysis. The authors apply this questionable approach to three project categories: specific cookstove projects, specific rice cultivation projects, and certain REDD+ projects.

Below we provide our high-level responses to each category:

In June 2024, CQC publicly disclosed (external) alleged criminal misconduct by its former CEO, including fraud that resulted in over-crediting. This is an active legal case, and federal authorities have laid criminal charges.

At the heart of this issue is not a simple failure of oversight on part of the VVBs. It’s alleged fraud on the side of the projects. Conflating potential criminal wrongdoing of one party with the shortcomings of another is both inaccurate and unfair.

Verra has also released a new cookstoves methodology that incorporates stringent measuring techniques that will prevent the recurrence of similar issues. This new methodology has been approved by the Integrity Council for the Voluntary Carbon Market (ICVCM) as meeting the highest bar of integrity (see here).

Yes, there were real concerns around the performance of certain VVBs. That’s exactly why Verra took decisive action: four VVBs involved in 37 rice projects were suspended.

This demonstrates that our VVB system is rigorous and robust and doesn’t just identify problems: it addresses them with real consequences. That’s what accountability looks like.

Verra has been clear and transparent about the need to update earlier methodologies for Reducing Emissions from Deforestation and Forest Degradation (REDD). That’s why we’ve invested years in developing a transformative new methodology, VM0048, which has also been approved by the ICVCM.

Most importantly in this context, the sources referenced by the authors do not point out that the performance of VVBs was an issue, and while the authors conclude that the issue is widespread because of the number of auditors (VVBs) involved in all 95 projects they list, Verra’s initial review of this analysis comes to a very different conclusion: out of all the VVBs who audited these 95 projects, only four were responsible for the majority of the project validations where issues have been identified. Moreover, this represents less than 4% of all validated VCS projects.

Ultimately, the paper fails to distinguish between legacy systems and current standards.

Verra’s new REDD+ methodology, for example, has directly addressed issues that were previously criticized for allowing developers to overstate their projects’ emissions. But the authors criticize Verra’s new REDD+ methodology by citing reviews that found “little evidence that tightened REDD+ methodologies between 2011 and 2019 led to better adherence by developers or greater due diligence by auditors”—despite the fact that Verra’s new methodology was only released in 2023 and no project using the methodology has completed registration, so no outcome of any auditor reviews is yet available.

Even more concerning is the inclusion of cases like Kariba, a project involving a self-acknowledged bad actor, or Brazilian projects alleged to be part of illegal timber operations.

Again, these are complex legal and governance issues, not simple VVB failures. Lumping them together under one banner misleads the reader and erodes meaningful discourse.

The paper also cites a study by West et al., which alleges that only 10% of forest carbon credits issued by Verra represented real emission reductions. This conclusion has been discredited, including by the chief scientist of Space Intelligence (external) and through Verra’s own technical review, which found serious flaws in the study’s methodology and assumptions.

The paper argues that because auditors are hired by project developers, they cannot act independently and therefore cannot ensure the environmental integrity of carbon credits. This reflects a fundamental misunderstanding of how third-party auditing works: not just in carbon markets, but across virtually every regulated industry. Whether it’s financial audits, food safety inspections, or environmental certifications, the party seeking certification typically pays for the audit. Who else would? What matters is not who is paying the bill, but which systems are in place to ensure auditor independence, oversight, and accountability—all of which Verra has significantly strengthened.

It is critical to understand the nature of how carbon markets work when criticizing the way projects are audited. Audits are not one-size-fits-all: each project is deeply complex and context-specific, shaped by local geography, the type of project, and the safeguards required. As such, the costs for these independent reviews can’t be standardized upfront; they must be negotiated between those most closely involved, reflecting the depth, scope, and uniqueness of each project’s requirements.

The authors of the paper also argue that auditors are incapable of making judgments such as “additionality” or “permanence.” This misunderstands the function of auditing in carbon markets. The job of the auditor is not to invent the rules, but to determine whether a project has credibly followed the rules, which are themselves designed to manage uncertainty through clear, conservative criteria. These include required documentation, risk buffers, leakage deductions, and project-specific monitoring.

Verra’s system reflects global best practices for oversight and independence. All VVBs operating under Verra’s programs must be accredited by International Accreditation Forum (IAF) members under the Multilateral Recognition Arrangement (MLA), a rigorous international standard that ensures competence, impartiality, and accountability.

Every audit submitted undergoes an internal review by Verra staff before any projects are certified or carbon credits are issued. If issues are identified (and they frequently are), credit issuances are denied or credit amounts revised, and VVBs are required to address the concerns. Again, this is standard practice across industries: while third-party auditors are heavily relied on, organizations will also have their own internal audit teams.

In 2024, Verra launched a comprehensive Performance Monitoring Program (PMP) for VVBs, including a formal scorecard system that assesses auditor performance across categories such as consistency, accuracy, and adherence to standards. Underperforming auditors are required to undertake corrective actions or risk suspension.

Importantly, carbon markets are continually evolving through incorporating new data, improving methodologies, and strengthening oversight structures. Dismissing the entire system because it once had flaws is like abandoning medical science because early vaccines weren’t perfect.

Most regrettably, the paper fails to consider the real-world impact carbon markets are already having. More than 1.3 billion verified carbon credits have been issued by Verra alone, enabling finance to flow to over 2,500 projects across 125 countries. These projects include smallholder agroforestry programs in East Africa, community waste recovery in Senegal, and clean cooking access in South Asia. For many of these communities, carbon finance is the only climate finance reaching them, providing a critical source of livelihoods and enabling them to conserve local landscapes.

Blanket criticism that ignores this reality, and the people behind it, is incomplete at best, and counterproductive at worst.

While we welcome scrutiny, we reject narratives that are unsubstantiated or that suggest the solution to any existing weaknesses is to dismantle one of the few mechanisms currently delivering results.