Patrick Greenfield Fri 4 Oct 2024 06.00 BST
A former carbon offsetting executive has been charged with fraud by US federal authorities, who allege that he helped to manipulate data from projects in rural Africa and Asia to fraudulently obtain carbon credits worth tens of millions of dollars.
Kenneth Newcombe, former CEO of C-Quest Capital LLC and a leading figure in the offsetting industry, was indicted on Wednesday in New York with commodities and wire fraud.
Prosecutors alleged he was part of a multi-year scheme that manipulated information on the impact of cooking stove projects in Africa and south-east Asia to make them appear far more successful at reducing emissions than they were in reality, also using the figures to attract investment of more than $100m in C-Quest.
From 2007 to December 2023, the 77-year-old was a board member of Verra, the world’s leading certifier of carbon offsets, and he also worked at the World Bank and Goldman Sachs at different times. He faces up to 20 years in prison if he is convicted of the most serious charges. He denies all allegations against him.
A spokesperson for Newcombe told Bloomberg that their client was dying of cancer. “He is confident that if he lives to see a jury hear this case, that jury will reject these false charges and return his good name to him,” the spokesperson said.
Cooking stove projects are one of the most popular carbon offsetting schemes, theoretically generating emissions reductions by swapping smoky fuels such as wood, paraffin or kerosene with cleaner alternatives.
By changing fuels, they can have major benefits: improving air quality, reducing the amount of time people spend collecting wood and slowing the loss of the world’s forests. But studies have raised widespread concerns about their claimed environmental impact, finding that schemes are overstating their effect by an average of 1,000%.
Shell and BP have both invested in C-Quest and are among several leading firms that have bought carbon credits from the firm.
Newcombe stepped down as CEO of C-Quest in February this year. In June, the new management of C-Quest announced that they had reported their former CEO to US authorities for his role in allegedly faking emissions data to generate millions of worthless carbon credits.
Following the announcement Verra said it was suspending the 27 projects implicated in the allegations and that it would be working with C-Quest to cancel the overissued credits as quickly as possible. Its statement at the time added: “Verra and the voluntary carbon market (VCM) as a whole are built on trust and integrity. We take any accusation of impropriety that undermines that trust very seriously.”
On Wednesday, US authorities said they would not be pursuing charges against C-Quest due to its open and timely disclosure of the alleged wrongdoing.
Prosecutors also charged Tridip Goswami, former head of C-Quest’s carbon and sustainability accounting team, with fraud. He could not be immediately reached for comment. Former chief operating officer Jason Steele has pleaded guilty to charges and is cooperating with the US government, the announcement said.
US attorney Damian Williams said: “As alleged, Kenneth Newcombe and Tridip Goswami, among others, engaged in a multi-year scheme to fraudulently obtain carbon credits by using manipulated and misleading data. They then sold those credits to unsuspecting buyers in the multi-billion-dollar global market for carbon credits.”
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