Willer Nature Gazette #3: CARBON OFFSETS - EFFECTIVE OR JUST PR???
You will be hearing a lot about pledges from companies and governments to cut greenhouse gas emissions to “net zero,” effectively aiming to eliminate their warming impact to stave off climate change. Ideally, a big chunk of that will come from switching to new lower-carbon technologies, developing more energy-efficient manufacturing processes, switching power plants to renewable sources and recycling materials more effectively. But what about the rest? Many companies claim it’s not economically feasible to go all the way. That’s where the concept of carbon offsets comes in.
Carbon offsets are often shown as one of the ways we can reduce greenhouse gas (GHG) emissions and our carbon footprint to ensure a sustainable planet for future generations.?
What are carbon offsets?
The idea is that when a company, government or individual is responsible for emitting carbon dioxide, the same amount of the greenhouse gas will be removed from the atmosphere by other means to compensate. Companies invest in environmental projects to balance out their carbon footprint. Every tonne of emissions an environmental project reduces creates one carbon offset or one carbon credit. Companies can invest in these projects directly or buy carbon credits to reduce their carbon footprints. Carbon credits are tradeable on the market and can be controversial in how easy they are to attain.?
Companies can buy them through the Voluntary Carbon Market (VCM). Any carbon emitted by the company is neutralised by purchasing the equivalent amount of carbon credits, some of which are carbon removal projects. Some provide other sustainability benefits such as clean drinking water etc. However, for those offsets that sequester carbon, the removals are not calculated over the same timeframe as the emissions.?
For example, a 1-hour flight offset by rainforest credits would be eventually neutralised by offsets calculated over the lifetime of the trees planted – 25 to 100 years. The purchaser usually understands that their flight emissions are immediately neutralised but the years of difference in timeframes create what we call ‘carbon debt’ – a debt we don’t have time to repay, according to the latest climate science.?
The four main types of projects to generate carbon offsets are-
Reforestation and conservation have become very popular offsetting schemes. Credits are created based on either the carbon captured by new trees or the carbon not released through protecting old trees. These projects are based all across the world, from growing forests in the UK to replanting mangroves in Madagascar, to “re-wilding” the rainforests of Brazil. Forestry projects are not the cheapest offset option, but they are often chosen for their many benefits outside of the carbon credits they offer. Protecting ecosystems, wildlife, and social heritage is significant for companies offsetting their carbon emissions for the corporate social responsibility (CSR) element.?
Renewable energy offsets help build or maintain chiefly solar, wind or hydro sites. By investing in these projects, a company is boosting the amount of renewable energy on the grid, creating jobs, decreasing reliance on fossil fuels, and bolstering the sector’s global growth. Take, for example, The Bokhol Plant in Senegal. This project is one of the largest in West Africa, providing 160,000 people with access to renewable energy. It also saves the government 5 million dollars every year & creates jobs in the region. Plus, the profits from selling carbon credits are often fed back into local community projects.
Community projects often help introduce energy-efficient methods or technology to undeveloped communities. Projects like this not only help to make entire regions more sustainable, they can provide empowerment and independence that can lift communities out of poverty. It means that projects once purely philanthropic can now provide companies with direct benefits like carbon credits. For example, the female-led Water, Sanitation and Hygiene (WASH) project in Ethiopia, provides clean water to communities by fixing and funding long-term maintenance for boreholes. How does this reduce carbon emissions? Families will no longer have to burn firewood to boil water, which will protect local forests, prevent carbon emissions and reduces indoor smoke pollution. In addition to the health and environmental benefits, the female-led committees that provide work to local women manage the project.
A waste-to-energy project often involves capturing methane and converting it into electricity. Sometimes this means capturing landfill gas or villages' human or agricultural waste. One such project in Vietnam is training locals to build and maintain biogas digesters that turn waste into affordable, clean and sustainable energy. It reduces the methane released into the atmosphere. And helps protect the local forests which would otherwise be depleted through sourcing firewood.
EFFECTIVE or JUST PR...???
The company offset initiatives have been widely criticized for carbon accounting issues, their longevity, and their negative impacts on local communities, with many claiming that carbon offsetting allows companies to justify business-as-usual activities. It is because the initiatives allow companies to offset carbon instead of prioritizing in-house emissions reductions and could lead to double-counting carbon credits or investing in non-verified credits. As major corporations look to buy carbon credits to offset emissions, critics question the value of “legacy” credits from green projects that are a decade or older.?
The research into Verra, the world’s leading carbon standard for the rapidly growing $2bn (￡1.6bn) voluntary offsets market, has found that, based on analysis of a significant percentage of the projects, more than 90% of their rainforest offset credits – among the most commonly used by companies – are likely to be “phantom credits” and do not represent genuine carbon reductions. Rainforest protection credits are the most common type on the market. And it’s exploding, so these findings matter. But these problems are not just limited to this credit type. These problems exist with nearly every kind of credit.
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Any specific government or organization is not administering the Voluntary Carbon Markets, and there’s considerable debate about how it has evolved. The projects issued over 344 million carbon offsets in 2021, up from 185 million in 2020. Surprisingly, just 4% of them remove CO? from the atmosphere, according to data from the Taskforce on Scaling Voluntary Carbon Markets. The analysis raises questions over the credits bought by several internationally renowned companies – some of them have labelled their products “carbon neutral” or told their consumers they fly, buy new clothes or eat certain foods without worsening the climate crisis.
A group of around 50 academics and activists who wrote to Carney in December took a line about forest-based carbon credits. “There is an inherently high risk that forest offset credits do not represent real emission reductions,” they said. “Appalling track record” of the CDM, they added, showed that “carbon offsetting does not accelerate but on the contrary has been shown to delay climate action.”
One of the signatories, Doreen Stabinsky of the College of the Atlantic in Maine, sees credits as often benefitting corporations seeking “to maintain the status quo.” Total exemplified that, she said. While boasting of its “carbon-neutral” LNG, the company is pressing ahead with a $4 billion pipeline to take oil 900 miles from new wells it is drilling on the shore of Lake Albert to an Indian Ocean port in Tanzania. Such practices have been likened to “papal indulgences”, referring to developing nations’ attempt to absolve environmental offences in the same way middle age Catholics paid the church to eliminate their sins.
In theory, carbon offsets should be a way for high-carbon companies that cannot affordably cut emissions directly to finance carbon cuts elsewhere, effectively drawing down net emissions. But in practice, many offsets are based on dubious assumptions and calculations that provide a veneer of climate progress without actually reducing emissions.
Bloomberg found that most corporate offset purchases were made with customers in mind, to offer specific products—from seats on a flight to shipments of natural gas—that could be upsold as “carbon neutral.” What’s needed, experts say, is to reform the credit system to deliver actual carbon reductions.
Conclusion...
Some want to reform the existing carbon credit markets to weed out the junk. “New rules are needed to exclude older credits from the market,” says University College London’s Maslin. Turner hopes Carney’s proposed new, bigger voluntary market can clean up the business. But Dufrasne, of Carbon Market Watch, calls the new initiative “so far mostly a PR stunt… for the financial sector to legitimize their new-found enthusiasm for carbon markets.”
Barbara Haya, the director of the Berkeley Carbon Trading Project, has been researching carbon credits for 20 years, hoping to find a way to make the system function. She said: “The implications of this analysis are huge. Companies are using credits to make claims of reducing emissions when most of these credits don’t represent emissions reductions at all.
“One strategy to improve the market is to show what the problems are and really force the registries to tighten up their rules so that the market could be trusted. But I’m starting to give up on that. I started studying carbon offsets 20 years ago studying problems with protocols and programs. Here I am, 20 years later having the same conversation. We need an alternative process. The offset market is broken.”
Also, last September, a group of academics at Oxford University came up with a set of “principles for net zero aligned carbon offsetting.” They said that if companies want to end their contribution to climate change, they should first reduce their emissions. Then, if they need offsets, they should shift from projects that avoid emissions to projects that deliver direct carbon removal. And they should concentrate on schemes that deliver the longest-lasting CO2 removal. That means chemically capturing carbon from the air or stacking emissions and burying it underground. It would effectively exclude offsets that use trees and soils to suck up carbon, because of what Oxford ecologist and co-author Yadvinder Malhi calls “the risk of reversal, if ecosystems are degraded.”
As the world enters a new era of ‘conscious capitalism’, it is fundamental for companies of all sizes to acknowledge the need to prioritize eliminating carbon emissions rather than relying on poor offsetting practices. To do this, governments should increase pressure on companies to explore all options for embracing the energy transition while living up to net-zero pledges. Primarily, companies should only purchase carbon offsets after initially exhausting all other options to reach ‘net zero’ status. To help replenish the integrity of the voluntary carbon offset market, it is also crucial to standardize and regulate the carbon accounting and quality control of emissions. The voluntary carbon offset market not only needs to have rigorous standards but also needs to become a lot larger.??
“In the end,”
Offsetting schemes need to recognise that the only way to compensate for the impact of pulling carbon out of rocks is to put it back. No amount of creative accounting can alter that.
says Oxford climate scientist Myles Allen.
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Strategic communications expert and climate design leader - I provide real answers about climate change and help develop solutions for a positive future.
1 年Well articulated ?? thank you Divyang D.