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The New Yorker: ‘The Great Cash-for-Carbon Hustle’ – ‘The market’s largest offsetting firm sold millions of credits for carbon reductions that weren’t real’

By Heidi Blake

One evening in November, 2021, a group of men assembled at sundown on the terrace of the Ruckomechi Camp, a safari resort on the Zambezi River. Since arriving by private plane, they had gone out lion-spotting, boated down the river, and landed a giant tiger fish; now they were clinking gin-and-tonics. Hippos wallowed in the water below.

The party was led by Renat Heuberger, a forty-four-year-old Swiss entrepreneur with narrow eyes and a cropped copper beard. Heuberger was the chief executive of South Pole, the world’s largest carbon-offsetting firm, and he had come to Zimbabwe to fight off an urgent threat to his company.

A decade earlier, South Pole had signed a deal to sell carbon offsets from an effort to protect a vast swath of forest on the banks of Lake Kariba, upriver from the camp. The Kariba project, spanning an area ten times the size of New York City, was among the world’s first “avoided deforestation” programs; by deterring local people from chopping down trees, it promised to prevent the release of tens of millions of tons of greenhouse gas. Leading corporations, including Volkswagen, Gucci, Nestlé, Porsche, and Delta Air Lines, paid South Pole nearly a hundred million dollars for Kariba credits, allowing them to market goods or services as “carbon neutral.”

South Pole thus pioneered a model of carbon offsetting that has been counted among our best hopes for staving off climate catastrophe: a mechanism that diverts funds from polluters in wealthy countries to protect crucial ecosystems in the Global South. Heuberger, a kinetic, grandiloquent man, speaks expansively about his mission. “We’re here to save the climate,” he told me.

As a child, Heuberger spent his spare time gluing protest flyers to car windows, and he considered himself an activist. But, as he built his company, he had developed a consumer-friendly brand of climate optimism. “It’s not true that to save the climate we will all need to go into perpetual lockdown or stop having fun,” he said, promoting Porsche’s offsetting program. “In fact, it’s the opposite”—drivers should enjoy their vehicles, knowing that “every ton of CO2 they compensate for is backed by a verified emission reduction.”

This perspective was enthusiastically received: Heuberger had regular speaking engagements at Davos and a spot in the World Economic Forum’s network of experts. As brands scrambled for inexpensive ways to reduce emissions, the market for offsets surged, quadrupling in 2021 alone. That year, South Pole was approaching a billion-dollar valuation, which would make it the world’s first “carbon unicorn.”

But alarming news had reached the company’s headquarters, in Zurich: it was at risk of losing its most lucrative project. By the terms of the Kariba deal, the company purchased carbon credits from a developer who oversaw the area’s forestland, and sold them for a twenty-five-per-cent commission. Now a competitor had offered the developer a substantial payment to take over the project. To help devise a response, Heuberger turned to an old friend from college, Dirk Muench, who had recently joined South Pole. Muench had left Wall Street to support climate action in the world’s poorest places. He was a self-confessed stickler, and could be too fastidious for Heuberger’s taste—but he was a skilled dealmaker.