CNA Explains: What happens to carbon credits when the forests protecting them burn?

Wildfires in Indonesia are endangering forests vital to carbon credit initiatives. This raises questions for companies that have paid to offset their emissions and whether the protective measures are adequate. Picture paying to safeguard a forest miles away, only to witness it ablaze. Is the climate advantage you compensated for now a mere memory?

Companies procure carbon credits globally, including from Indonesia, to offset their operations' emissions. The market continues to draw interest, with 1,056 new buyers from the Asia-Pacific region joining the carbon credit market last year, according to carbon market database Allied Offsets. However, as Indonesia's wildfires encroach upon areas associated with carbon credit projects, doubts arise about the validity of those credits, who should bear the cost of the carbon released, and if current safeguards suffice.