30 Carbon Offsets
There is no clear standard of what constitutes a carbon offset, and there is no global organization that defines offsets, sets criteria for them or verifies their validity.
Carbon offset schemes allow individuals and companies to invest in environmental projects around the world in order to balance out their own carbon footprints. The projects are usually based in developing countries and most commonly are designed to reduce future emissions. This might involve rolling out clean energy technologies or purchasing and ripping up carbon credits from an emissions trading scheme. Other schemes work by soaking up CO2 directly from the air through the planting of trees.
- Selling Indulgencies* George Monbiot famously compared carbon offsets with the ancient Catholic church’s practice of selling indulgences: absolution from sins and reduced time in purgatory in return for financial donations to the church. Just as indulgences allowed the rich to feel better about sinful behaviour without actually changing their ways, carbon offsets allow us to buy complacency, political apathy and self-satisfaction.
Additionality the key issue for anyone who does want to offset is whether the scheme you’re funding actually achieves the carbon savings promised. This boils down not just to the effectiveness of the project at soaking up CO2 or avoiding future emissions. Effectiveness is important but not enough. You also need to be sure that the carbon savings are additional to any savings which might have happened anyway. The problem is that it’s almost impossible to prove additionality with absolute certainly, as no one can be sure what will happen in the future, or what would have happened if the project had never existed.
Partly because of the difficulty of ensuring additionality, many offset providers guarantee their emissions savings. This way, if the emissions savings don’t come through or they turn out to be “non-additional”, the provider promises to make up the loss via another project.
As the offset market grows, some offset companies have enough capital to invest in projects speculatively: they fund an offset project and then sell the carbon savings once the cuts have actually been made. This avoids the difficulty of predicting the future – and also avoids the claim that a carbon cut made some years in the future is worth less than a cut made now.
These kinds of guarantees and policies provide some reassurances, but do they mean anything in the real world? Without actually visiting the offset projects ourselves, how can individuals be sure that the projects are functioning as they should?
Even if offset projects do work as advertised, some environmentalists argue that they’re still a bad idea. If we’re to tackle climate change, they argue, the projects being rolled out by offset companies should be happening anyway, funded by governments around the world, while companies and individuals reduce their carbon footprints directly. Only in this way – by doing everything possible to make reductions everywhere, rather than polluting in one place and offsetting in another – does the world have a good chance of avoiding runaway climate change, such critics claim.
Market Standards To try and answer these questions, the voluntary offset market has developed various standards, which are a bit like the certification systems used for fairly traded or organic food. These include the Voluntary Gold Standard (VGS) and the Voluntary Carbon Standard (VCS). Offsets with these standards offer extra credibility, but that still doesn’t make them watertight. Heather Rogers, author of Green Gone Wrong, visited a number of offset schemes in India and found all kinds of irregularities.
Offset Price Many people are confused by the low prices of carbon offsets. If it’s so bad for the environment to fly, can a few pounds really be enough to counteract the impact? The answer is that, at present, there are all kinds of ways to reduce emissions very inexpensively. After all, a single low-energy lightbulb, available for just £1 or so, can over the space of six years save 250kg of CO2 – equivalent to a short flight. That’s not to say that offsetting is necessarily valid, or that plugging in a low-energy lightbulb makes up for flying. The point is simply that the world is full of inexpensive ways to reduce emissions. In theory, if enough people started offsetting, or if governments started acting seriously to tackle global warming, then the price of offsets would gradually rise, as the low-hanging fruit of emissions savings – the easiest and cheapest “quick wins” – would get used up.
Another frequent point of confusion about the cost of offsetting is that different offset companies quote different prices for offsetting the same activity. There are two reasons for this. First, there are various ways of estimating the precise impact on climate change of certain types of activity – including flying, which affects global temperature in various different ways. Second, different types of offset project will inevitably have different costs – especially given that projects may be chosen not just for the CO2 impacts but for their broader social benefits.
Duncan Clark (Guardian 2011): Complete Guide to Carbon Offsetting
Offsetting carbon reductions do nothing to eliminate emissions, and they delay tough choices
While net-zero goals are based on climate science, they allow governments and corporations responsible for emissions to delay tough decisions, rely on new and unproven technology, have no clear standards to account for the amount of carbon that goes into and comes out of the atmosphere, lack an international governing body to apply any such standards, and do not address the root cause of climate change by lowering fossil fuel use directly.
“Net-zero by 2050 is a meaningless target,” DiPerna said. “If you look at the arc of decision-making, if you look at the arc of an executive’s career, if you look at the arc of a presidential administration, you got four, three, two, five years to execute your power,” she said. “You can promise anything for three decades, but it’s what can you do within the arc of your control that’s important”.
It’s a relatively expensive way to reduce emissions. Reducing the emissions before they go into the atmosphere tends to be much cheaper than removing them afterward.
Hulac (2021) Off-put by Offsets
Irfan
Carbon Offsets Explained
Carbon offset projects have a long history of overpromising and underdelivering, threatening fragile progress on climate change. Some of the more established offset programs — like the United Nations’ REDD+ program or the Kyoto Protocol’s Clean Development Mechanism — have had a poor track record of meaningful reductions in emissions. Disagreements about rules around offsets also continue to derail international climate change negotiations. So there’s a lot of well-deserved skepticism around them.
But advocates say that the enormous potential of offsets to combat climate change, protect nature, and route money to the parts of the planet that need it the most shows that they need to be part of the portfolio of solutions to limit warming. Here are five of the most important things to know.
Irfan (2022) Can you really negate your carbon emissions? Carbon offsets, explained
30.1 Market Upscaling
Carney presented plans at the virtual Davos meeting of global business and political leaders on Wednesday evening for vast increases in the number of carbon offsets sold, aiming to expand the market from about $300m at present to between $50bn and $100bn a year.
He told the conference that he “categorically rejected” criticism that offsets were greenwash. Companies buying offsets in the market would be subject to scrutiny, and must have clear plans to reach net zero, “not something written on the back of a napkin”, he said, but would need offsets to fulfil their plans.
“This is bringing those companies into a formal system,” he said. “This is about maximising the use of a very limited [global] carbon budget. This is complementary [to companies taking action to reduce their own emissions] and is one piece of the puzzle. We do need this market.”
The leaders of two UK environmental charities have written to Mark Carney, the UN climate envoy and former governor of the Bank of England, to raise concerns over the blueprint for carbon offsetting that could result in billions of new carbon credits being sold around the world.
Campaigners say system risks becoming greenwashing exercise unless loopholes closed.
The markets are used as a cover by companies that wish to give the appearance of working towards net zero emissions but prefer buying cheap credits to the more difficult task of cutting their emissio
This initiative risks setting a terrible example ahead of the critical carbon market negotiations at the global climate summit in Glasgow later this year. [It] seems to have ignored past failures of offsetting schemes to guarantee emission cuts. At the same time, it assumes that the natural world has unlimited potential to absorb climate-wrecking emissions. It fails to acknowledge that the most important thing companies must do is to reduce their own emissions and use of fossil fuels.
Carney’s scheme will serve as a giant get-out-of-jail-free card for polluting companies.
There is a danger that it becomes a large international greenwashing exercise, creating a market with low standards but high PR value,
If you scale a bad thing, it doesn’t matter how big you make it, it’s still bad.
As Mark Carney presented the world’s top political and business leaders with a blueprint to scale up the voluntary carbon market on Wednesday, campaigners warned key criteria to improve environmental integrity were missing.
With carbon neutrality pledges becoming the benchmark for climate ambition, businesses around the world are looking to offset the emissions they cannot cut and for cheaper ways to meet their climate goals.
Its report identified ways to bring coherence to what is currently a fragmented market. But it said little on how to ensure projects financed through the market deliver genuinely additional emissions reductions.
An open letter to Carney signed by 47 researchers, academics and campaigners ahead of the launch accused the initiative of trying to “minimise the cost of compliance for private corporations” at the cost of environmental integrity.
An independent process driven by civil society should define what constitute a quality offset to avoid the private sector self-regulating.
Sequestrating carbon in ecosystems should not replace real emissions cuts. We need to sequester past emissions that are already in the atmosphere whereas offsetting by definition is about future emissions. The whole point of an offset is that an entity keeps emitting. There is a striking lack of binding and credible measures to actually prioritise emissions reductions.
The biodiversity co-benefits that result from the voluntary carbon market are “a strong assumption” with no evidence.
It’s important not to forget the huge flows of finance currently facilitating the drivers of biodiversity loss - warning against the market being perceived as an adequate substitute to conservation.
Memo TSVCM Report
Chaired by Bill Winters, group chief executive of Standard Chartered, and sponsored by the Institute of International Finance (IIF), the taskforce includes some of the world’s most polluting companies: airline easyJet, plane manufacturer Boeing, oil giants BP, Shell and Total, and steel producer Tata Steel. No green groups are represented among its members.
The need for climate action, and tools to mobilize finance for the low-carbon and resilient transition, grows more urgent by the day. To achieve the Paris goals to limit global warming to 1.5 degrees Celsius, the global community needs to reach net-zero emissions by no later than 2050. This will require a whole-economy transition—every company, every bank, every insurer and investor will have to adjust their business models, develop credible plans for the transition, and implement them.
Many companies, especially in hard-to- abate sectors, will need to offset emissions as they achieve their decarbonization goals, creating a surge in demand for credible offsets.
To facilitate this global decarbonization there is a need for a large, transparent, verifiable and robust voluntary carbon market, one that promotes genuine action of high environmental integrity.
Along with the carbon avoided, reduced, or removed, the scaling up of markets has the further potential to help support financial flows to the Global South, as activities and projects in these countries can provide a cost- effective source of these carbon-emission reductions. Voluntary carbon markets can also play a critical role in scaling down cost curves for emerging climate technologies, bringing these technologies to market earlier, and allowing them to be used in direct decarbonization efforts.
The Taskforce has found six key areas where efforts are required to achieve a large, transparent, verifiable, and robust voluntary carbon market; these themes are establishing core carbon principles, core carbon reference contracts, infrastructure, offset legitimacy, market integrity, and demand signaling.
!! Direct emissions reductions by corporates must be the priority, with appropriate offsetting playing an important complementary role to accelerate climate mitigation action.