In this episode of The CDR Policy Scoop, Sebastian Manhart sits down with Dr. Ruth Dagan, Senior Partner and Head of Environment & Climate Change at Herzog Law, and Co-Chair of the IETA Legal Working Group, to cover two legal challenges that are quietly suppressing corporate demand for carbon credits.
The first is litigation risk. Since 2022, climate washing claims have increased by seventy percent globally, with around 160 cases on the books and fifty-four relating specifically to carbon credit offsets. Apple's carbon neutral Watch campaign was lost in Germany and only tentatively won in the US. The upshot is that many companies are choosing to say nothing about their climate action at all. Ruth calls this green-hushing, and argues it is actively draining demand from the voluntary carbon market.
The conversation covers the two regulatory responses now taking shape: the EU Empowering Consumers Directive, coming into force in September, which blacklists product-level carbon neutrality claims outright, and California's AB 1911, which proposes the opposite, a safe harbor that would actively protect companies using high-integrity credits. Ruth outlines the work being led by IETA and the Coalition to Grow Carbon Markets, now backed by eleven governments.
The second challenge is more fundamental: most carbon credit registries, including PACM, include explicit disclaimers that they make no legal statement about who actually owns the credits in an account. Ruth explains how this came to be, what it means for institutional investment, and how the Unidroit project, due to conclude in early 2027, offers a route to resolution.