Jack Branning is a prosperous Mississippi businessman, with commercial interests stretching from Hattiesburg to Baton Rouge, La. He’s seen a lot of deals in his 89 years, but few were as curious as the one he was offered back in 2013.

That’s when a forester walked into his office in Vicksburg and inquired about 1,700 acres of former soybean fields he owned nearby. The man worked for GreenTrees LLC, a small company that says it combats climate change by reforesting thousands of acres of farmland along the lower Mississippi River. GreenTrees says it pays landowners to convert their croplands to forests, tallies the planet-warming carbon absorbed by those trees, and then sells credit for the carbon reductions to big corporations that want to offset their own greenhouse gas emissions.

GreenTrees couldn’t reforest Branning’s land, because he’d already planted trees there more than a decade earlier thanks to a government conservation program. But the forester said the land still qualified for carbon payments. In effect, GreenTrees was offering to pay Branning for doing something he’d already done — and then take credit for it.

“It worked out good for a guy like me,” says Branning, who’s collected thousands of dollars from the deal so far. “I had the trees there anyway, and they were not going away.”

GreenTrees calls itself the largest carbon reforestation project in North America. It has signed contracts with more than 550 landowners since its inception 13 years ago, and claims its payments cause landowners like Branning to plant and then protect forests, thereby taking credit for the carbon dioxide soaked up by their trees.

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GreenTrees then sells these credits, known as carbon offsets, to some of the world’s biggest corporations, including Royal Dutch Shell, Duke Energy, Norfolk Southern, United Airlines, and the Walt Disney Co. The corporate buyers can use the credits to say they’ve reduced their own carbon footprints. Bank of America, MetLife, Salesforce.com, Microsoft, and Boston Consulting Group are among the companies that have purchased GreenTrees offsets to help represent that their operations are “carbon neutral”—meaning they’ve zeroed out their contributions to global warming.

But interviews with 17 participating landowners, as well as an examination of hundreds of pages of contracts and project documents, reveal that GreenTrees usually takes credit for trees that were already planted, or would have been planted anyway. Because GreenTrees’ payments aren’t causing most of the carbon sequestration to happen, the climate benefits claimed by the project are inflated. That means corporations buying offsets from GreenTrees aren’t really cutting their greenhouse gas emissions as much as they contend.

It’s another example of how carbon offsets—an increasingly popular tool used by thousands of companies to declare improved environmental performances — sometimes fall short of big claims. The Nature Conservancy, the world’s largest environmental group, has developed offset projects that generate millions of dollars in revenue to preserve forests that aren’t in danger of being harvested. Unlike the Conservancy’s projects at the center of a Bloomberg Green investigation, which maintain they’re protecting existing trees, GreenTrees takes credit for the planting of new forests.

Both cases illustrate how weak rules and a lack of oversight can plague the offsets market, just as many corporations and policymakers try to increase their supply to help meet aggressive climate-change targets. The global airline industry, for instance, is poised to launch a program next month that will eventually spend billions of dollars on carbon offsets to help flatten net emissions from international air travel. Some credits from GreenTrees and the Conservancy will be eligible for this program.

At least one carrier is having second thoughts. United Airlines, which purchased credits from GreenTrees in 2015, said this month that it’s moving away from carbon offsets and will instead invest millions in a company that draws CO₂ out of the air and buries it underground.

“Offsets present a very attractive shortcut for companies to reduce their emissions,” says Kyle Harrison, an analyst with BloombergNEF, a clean energy research firm. “But if this market is going to keep scaling up, there needs to be firm rules in place.”

GreenTrees, in effect, is piggybacking on government programs. Instead of influencing people to grow trees, as it claims to do, many landowners say GreenTrees just provides a bit of additional income for something they’d already decided to do.

GreenTrees executives declined to be interviewed for this story, but the company noted in a written statement that independent auditors have repeatedly verified that the project adheres to rules set by the American Carbon Registry, a leading standard-setting body. Moreover, it said, landowners who participate in government conservation programs have the right to collect carbon revenue—an arduous task that GreenTrees helps them accomplish. The revenue, it added, encourages landowners to put additional acreage into trees. “We need these landowners to use their land to make an impact, and the incentives created by this market help drive participation and maximize efforts,” a representative for the company wrote.

But climate policy experts say carbon offsets work only if they trigger a carbon reduction that wouldn’t have happened otherwise. In other words, the money from the corporations buying the offsets has to be the reason that trees are being planted or protected.

“You have to be able to show that buying the offsets caused this benefit to happen,” says Danny Cullenward, a lecturer at Stanford and the policy director at CarbonPlan, a nonprofit that analyzes carbon solutions. If offset projects pay people who were already reducing emissions for other reasons, he says, “they’re only selling hot air.”

Along a deeply rutted dirt road miles outside the nearest town in southeastern Arkansas, Allen Gilliam leans against the bed of his pickup truck for a closer look at his property. He was just a 10-year-old boy obsessed with Mickey Mantle and the New York Yankees when he moved here with his family in 1960. They worked the land to plant rice and cotton, and raised cattle and hogs. Years later, Gilliam put in massive ponds to raise catfish. But on this hot October afternoon, he nods approvingly at his transformed acreage, now a dense forest with 15-foot-tall cottonwoods, chest-high oak trees, and a thick bramble of bright-yellow goldenrod weeds that shudder in the breeze.

Gilliam decided to switch to trees around 2012 after he began feeling the physical toll of farming. His acreage had been accepted into the Conservation Reserve Program, a federal initiative that gives farmers annual payments to replace crops with natural habitat (trees, in Gilliam’s case) for 10 to 15 years. The CRP agreed to pay him $110 per acre each year. Shortly after receiving the government offer, GreenTrees called to invite him to simultaneously enroll in their carbon program. Gilliam accepted, even though it would generate less than 1/20th of the income from the CRP.

“Don’t get me wrong, we’re glad to get the extra $300 or $400,” says Gilliam. But, he adds, “even if GreenTrees wasn’t available, we would have gone ahead with the government tree program.”

The other 16 participating property owners interviewed by Bloomberg also say their GreenTrees agreements had no impact on their decisions to grow forests. All 17 say they’d enrolled the same acreage in government programs that require the planting of trees and pay significantly better than GreenTrees.

CRP is just one of these programs. Another government effort usually pays landowners a hefty onetime sum — occasionally topping $1 million — to put permanent easements on wetlands. These transactions hand control of the land to the government, which often restores it to trees.

Five of the landowners, including Gilliam, say they enrolled in GreenTrees around the same time they were accepted into a government program. GreenTrees even helped plant their saplings. In these cases, the company is creating an additional climate benefit since it plants trees that grow faster than those in a typical government forest. But GreenTrees isn’t taking credit for this additional increase in carbon. It’s claiming credit for all of the CO₂ soaked up by the forest, including the slower-growing trees that would have been planted anyway.

Perhaps most troubling, 12 other landowners said their trees were planted years before they knew anything about carbon credits or GreenTrees. When GreenTrees later enrolled these properties, it added no new trees. Rather, it began measuring—and selling credit for—the existing, taxpayer-funded trees.

GreenTrees declines to say how many of its landowners enrolled existing trees, but it appears to include the majority. A project report from 2017 that lists planting dates for 380 tracts of land participating in the carbon program indicates that 258 (or 68%) were seeded before the GreenTrees project began in 2008. “It’s hard to see the climate benefit in that,” says Royal Gardner, a law professor at Stetson University who studies environmental markets.

The company defends its recruitment of already existing trees by pointing to language that appears in landowners’ contracts. In nearly all, the signers attest that the prospect of future carbon revenues had influenced their decisions to plant trees, the company said. “The intent to capture carbon is clearly articulated,” wrote the company representative.

One Mississippi landholder, who requested anonymity, enrolled in GreenTrees nine years after the government paid him more than $1 million to plant and permanently protect trees. Although his GreenTrees contract on file at the county clerk’s office states that carbon revenues were a “major determination” in his decision to forgo crops and plant trees, he says he doesn’t remember that clause. “I had planted the trees—then, later on, I heard about the carbon credits from a friend,” he says.

Dubious carbon offsets call into question the lofty environmental claims made by the companies that buy them. Bank of America declared in January that it had become carbon neutral, in part by using offsets to cancel out its emissions. GreenTrees provided 15,000 tons, or about 19% of the offsets it used. Bank of America declined to comment.

Most of the companies that bought GreenTrees credits pointed to the project’s approval by a leading carbon registry and its validation by independent auditors. Microsoft, which has used GreenTrees to help erase its global warming emissions, acknowledged in a statement that “carbon finance and carbon markets aren’t fully developed” and called for more uniform standards. But it also defended the GreenTrees model, saying it incentivizes landowners to keep trees standing for longer than some government contracts do.

Indeed, the company guarantees that trees will remain in place on landowners’ property for 40 years, even though most of its agreements with landowners run for only 15 years. This means GreenTrees would be on the hook if acreage gets cleared before then, and the company would deduct any such losses from credits it sells in the future.

But the benefit of that 40-year guarantee is limited. First, it doesn’t affect numerous landowners, like Branning, who signed government contracts to permanently protect their land. For the others, clearing forest is a significant expense, and many whose federal conservation agreements expire are able to renew them.

Even GreenTrees has at times downplayed the risk that landowners could revert back to crops after their CRP contracts expire. In 2010, Page Gravely, then a GreenTrees executive, told trade publication Delta Farm Press: “When you look at the statistical data for landowners, a very small percentage that establish trees put that land back into some other use.”

Other companies, such as Shell, have used GreenTrees credits to market what they describe as carbon-neutral products. In a press release last year, the oil giant touted GreenTrees, among other projects, as helping it offer “zero-emissions” fuel in the Netherlands and the U.K. Shell said in a statement that it buys credits only if they comply with recognized standards and are vetted by third parties.

Auditors, indeed, have repeatedly confirmed that GreenTrees meets rules set by the American Carbon Registry, one of several bodies that set standards to govern the carbon market. ACR, one of the oldest and most widely used of these registries, is run by Winrock International, a nonprofit based in Little Rock, Ark.

In a written statement, ACR defended GreenTrees, saying the company “successfully leveraged” the government conservation programs to provide more attractive offerings for farmers. “ACR does not doubt the integrity of offsets from GreenTrees,” it added.

For more than two decades, GreenTrees’ co-founders Chandler Van Voorhis and Carey Crane have preached about the power of markets to solve environmental problems such as climate change. In the early 2000s, the duo hosted an environmental talk radio show, dubbed GreenWave Radio, which expounded on a future economy that “produces no waste or pollution, while maximizing profits.”

A key to this “next industrial revolution,” as they described it, was affixing a financial value to such natural assets as trees and water. “Right now, a tree does not show up on the balance sheet until it’s cut down,” said Van Voorhis in a video years later. “But that tree is producing value that is not being measured or recognized.”

The co-founders point to Crane’s mother, Maggie Bryant, a fox-hunting socialite and industrial heiress, as an inspiration. Decades ago, Bryant came to own a piece of Mississippi bottomland after the death of her husband. She called the property “Tara,” after the plantation in Gone with the Wind, and managed the land as a sustainable destination for hunters and birdwatchers.

When Van Voorhis and Crane began exploring the concept behind GreenTrees in 2003, they were drawn to the same terrain—the vast flood plains of the Mississippi Alluvial Valley. The 24 million acres of land span seven states and were once thick with forests. Since the late 1700s, about 80% of the trees have been cleared, with much of the land bulldozed for farming in the 1950s and ‘60s.

If they could persuade farmers to convert their acres back to trees, the impact on the climate would be substantial, they reasoned, maximizing carbon revenues while replanting forests. Instead of putting in only slow-growing hardwoods such as oaks, which take decades to mature and soak up carbon, they’d mix in fast-growing cottonwoods, which can sprout past 10 feet in a couple of years. The cottonwoods would gobble up carbon for a couple of decades—generating income through the sale of carbon credits—before being cleared to make way for the slower-growing hardwoods.

“Think of our design as the Intel Chip for reforestation,” wrote Van Voorhis in an article years later. “We can grow a hardwood forest eight times faster than any other design.”

By 2009, as Congress contemplated a mammoth bill to curtail greenhouse gas emissions, GreenTrees caught the attention of big polluters worried about costly new regulations.

Electric utility Duke Energy invested that year. As part of the deal, GreenTrees would plant more than 1 million trees on 1,700 acres and Duke would receive carbon offsets. Two years later, Norfolk Southern invested $5.6 million to plant 6 million trees and generate 1 million carbon credits for the railroad. (Norfolk Southern and Duke both say they haven’t yet used their GreenTrees credits to claim reductions in their emissions.)

Despite its work with major corporations, GreenTrees remained a lean operation. Even today, the company, which is based in The Plains, Va., lists only nine employees on its website, including Van Voorhis, Crane, and a couple of experienced foresters who work with landowners in the Mississippi Delta. Its parent company, C2I, also founded by Van Voorhis and Crane, operates a couple of small, complementary businesses, including a cottonwood nursery that supplies cuttings to GreenTrees.

When GreenTrees first began signing up landowners in early 2008, it appears to have targeted properties without forests. The first 22 tracts, listed years later in its project report, were all planted from 2008 to 2010. All of its early acreage was “jointly” enrolled in the CRP, according to its other project documents. The strategy, as described on an archived version of its website from 2008, was to add an incentive on top of the government conservation payments to persuade more landowners to switch to trees. “The addition of carbon-based income and other incentives from GreenTrees,” the website said, “are designed to tip the economic scales for landowners.”

But after a couple of years, GreenTrees appears to have switched its focus to recruit a lot of properties with standing trees. “Landowners now have a new opportunity to sell forest carbon from young, existing hardwood stands,” the company explained in a 2012 article published in Arkansas Out-of-Doors. It encouraged people who had enrolled in federal conservation programs in the previous six years to call.

Sometimes the company signed up landowners who’d put in their trees even earlier. Larry King decided nearly two decades ago to throw in the towel on his efforts to grow cotton and soybeans on 636 acres of flood-prone property about 45 miles outside of Jackson, Miss. “It was not conducive to farming,” he says

So King enrolled the land in the CRP program. Seven years after his trees were planted, he learned about carbon credits and GreenTrees from an article in the local newspaper. King said he called to inquire about enrolling these same taxpayer-funded trees into its carbon program. After a couple of years, GreenTrees agreed. “It was a no-brainer for me,” says King, who uses the carbon revenues help pay his property taxes. “I’ve already got the trees, and I didn’t have to do anything else.”

The practice of claiming credit for trees planted long ago troubles some in the carbon market. For instance, the Climate Action Reserve, another standard-setter for carbon offsets that competes with ACR, doesn’t allow projects to sign up property owners who planted trees more than one year earlier. “I’ve had untold numbers of those calls in my career,” says Craig Ebert, president of CAR. “They don’t want to do anything new. They just have a standing amount of carbon out there. Give me some credits. That is not a creditable activity if there’s no change of behavior.”

For Mark Trexler, it’s a story he’s seen play out time and again. Trexler wrote the first carbon offset methodology 30 years ago and has since worked on dozens of offset projects over the years as a consultant. Purveyors of forest carbon offsets often start out with the best of intentions; they want to help the planet and build a profitable business, he said. But prices for carbon credits are still too low—often $8 to $10 per ton—to spur major changes and lure hundreds of landowners. So project developers start looking for creative ways to build their business and enroll acres.

“You start finding good excuses to cut corners,” says Trexler. “And you end up in a place where you never intended to be.”

There are signs that some of the participants governing the offset market are tightening their guidelines. ACR, the registry that has approved the GreenTrees program, noted in an email that it has changed its rules for newer projects “to conform with emerging carbon market norms and further our ongoing commitment to quality and credibility.” The new rules include limits on the amount of time that can elapse between planting trees on a property and enrolling it for carbon credits.

In effect, the rule change is a subtle repudiation of the GreenTrees business model, signifying that the project could never get approved today unless it excluded scores of landowners like Jack Branning. That would disappoint the Mississippi octogenarian, whose conservation efforts were recognized with a national award in 2004, and who’s been using the extra GreenTrees income to augment those efforts. But as Branning points out, his trees are going to be here long after he’s gone—regardless of any money he gets for that carbon. “It’s kind of what you heard on the TV from time to time,” he says. “What the hell have you got to lose?”

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