In the aftermath of another global climate change conference, carbon offsetting has become a common buzzword – heralded by some as an easy way to mitigate the emissions created by flying, turning on the air conditioning or topping up the SUV at the service station.
But is carbon offsetting a valuable solution to addressing climate change, is it greenwashing – or is the truth somewhere in between?
The core of carbon offsetting is simple – it is an accounting mechanism purely of pluses and minuses. It is any pursuit that compensates for the CO2 emissions or other greenhouse gases in exchange for an emission reduction in a different place, for example, the Amazon rainforest. If you booked an air ticket in recent years, chances are the airline would have given you the opportunity to purchase carbon offsets to compensate for your share of the carbon emissions created by the flight.
The concept evolved when companies who wanted to demonstrate “climate credentials” worked with banks and traders, eager to profit from the said activities in exchange for financial support in offsetting projects.
In the bigger picture, carbon offsets can be bought or sold on a trading market. It seems that climate offsetting is no longer just advocacy; now it has turned into a billion-dollar multinational business.
According to a report, voluntary offsets reached almost $300 million in 2018 – the latest year where data is available – with nearly 100 million metric tons of CO2 traded. In addition, more than 170 companies to date and 77 countries have pledged to become carbon neutral by 2050, if not earlier.
The Taskforce on Scaling Voluntary Carbon Markets, led by UNFCCC (United Nations Framework Convention on Climate Change) envoy Mark Carney, together with major banks and corporations, including fuel companies like Shell, BP, and Stanchart, aims to “scale up” a “deep liquid” voluntary carbon offset market worth $100 billion by 2030.
This plan has been criticised for its potential to scale up greenwashing to massive proportions.
Climate activist Great Thunberg, who attended the COP26 climate conference, Tweeted: “The fossil fuel industry and banks are among the biggest climate villains” and “@Shell @BP & @StanChart are here in Glasgow trying to scale up offsetting & give polluters a free pass to keep polluting. Their plan could trash the 1.5°C goal, this Taskforce, and other schemes like it, are scams that could trash the goal of limiting global temperature rise to 1.5°C.”
Suppose an emission reduction can be equal to a carbon footprint of an activity. In that case, any company could easily label its activity as net-zero or carbon neutral. How do we determine which companies are genuinely for the planet, or just for profit?
The history of carbon offsetting
Carbon offsetting started in the late 1970s as part of the US Clean Air Act. The term ‘offset’ refers to emissions compensated for by a decrease in another location. New emissions in high-pollution areas were allowed only if other reductions occurred to offset an equivalent amount.
In more modern times, the term ‘carbon offset’ is now commonly used by many, ranging from green organisations to multi-billion dollar corporations, in an era of growing concern about the volume of carbon emissions being released into the atmosphere.
But the more prevalent the term becomes the more criticisms are being directed at the practice which has sparked controversies and been labelled by some as greenwashing.
The carbon offsetting process
While any individual can participate in voluntary offsetting, offsets can also be purchased and sold as part of compliance schemes, such as the aforementioned UNFCCC, another developed under the Kyoto Protocol, REDD, or the EU ETS (European Union Emission Trading Scheme), in which member countries of the EU can trade carbon allowances to meet regional emissions reduction targets.
There are many ways carbon offsets can be carried out, including tree planting, forest protection, or purchasing renewable energy. For example, if a part of the Amazon rainforest is preserved, with additional trees planted, a certain amount of CO2 is removed from the atmosphere. Besides that, biodiversity is protected, and additional employment is provided for the locals.
At first glance, the theory of carbon offsetting is a win-win situation: nations can exchange emissions and money to help meet each other’s goals, and funds can be deployed to prevent deforestation where needed. However, in practice, the true value of offsets is open to debate, with historical examples showing numerous drawbacks.
In the Chiapan lowlands in southern Mexico, a carbon offsetting program by REDD (Reducing Emissions from Deforestation and Forest Degradation) backfired, as Tracey Osborne, an associate professor and researcher at the University of Arizona specialising in forests and climate change mitigation, explained to Quartz.
A few REDD programs worked well for small-scale coffee farmers in the highlands, where farmers grow coffee under shade so that existing trees are not cut down. However, this was not the case in other areas.
Indigenous farmers typically farmed a field for five to seven years, then left it fallow (unsowed) for 20 years while working on a different land area. This type of agricultural practice helped reduce tremendous amounts of carbon – by farming fields for fewer years than they are left alone, the soil builds back its natural carbon stores. However, the REDD programs instructed the farmers not to touch the land at all.
“To get payments, they had to stop completely,” said Osborne. “They were encouraged to plant timber trees like mahogany and cedar as a form of reforestation approved by the carbon credit program.”
Unfortunately, the trees were hit by moth larvae which stunted their growth.
“The sad thing is that they spent so much time and energy on this when their traditional land-use practices sequestered and stored a significant amount of carbon.”
“The carbon credit program had not only failed to store more carbon, but it made indigenous people’s lives worse,” she added.
Changes in the political landscape can also significantly affect offset initiatives. Take, for example, the 2018 election of president Bolsonaro in Brazil. Before his win, the country was pioneering some of the earliest REDD pilot programs. An anti-deforestation program let Brazil receive some of the first payouts amounting to $96 million for emissions reduced during 2014-2015.
However, granted impunity under Bolsonaro’s regime, loggers and rangers set fires in the rainforest during the dry season, resulting in 2019 being a devastating year for the Amazon. Because of this, any accomplishments or savings achieved on offsets in the previous years were nullified.
“It’s like rewarding someone for having quit smoking for a few months, even though they are still smoking today,” Thomas Father, a social scientist with Heinrich Böll Stiftung, a German political foundation focused on green policy, told Mongabay.
The problem with carbon offsets
Critics of the carbon offset practice worry that carbon offsetting could tempt high-emitting countries to keep burning fossil fuels, knowing they can simply buy credits to ameliorate their climate sins – or, on the flip side, encourage setting shallow emissions goals that are easily beaten, allowing countries to sell any carbon savings they make in excess, reports the DW.
Carbon credits could allow a polluting country to close the gap in its climate goals by paying to preserve a rainforest. But we all know that solving the climate crisis isn’t as simple as planting trees.
When someone purchases carbon offsets, the money often gets directed to tree planting initiatives. Some of these projects do not disclose whether the newly planted trees will get harvested at some later time – at which point the offsetting is negated.
While century-old trees in natural ecosystems can store massive amounts of carbon, the planting of new trees is usually misleading. For example, some offset projects grow palm oil plantations and consider it reforestation, even though they’ll be cut down or have an even worse impact on the environment.
Consumers and businesses can also voluntarily purchase carbon credits to compensate for emissions.
In another example, individuals can offset their carbon footprint created by flying on planes by paying a certain amount to the airline. This money is paid into projects which absorb carbon. For example, Qantas runs a program where it offers customers an offset when they purchase a ticket – and matches the contribution. Australia’s Qantas, for example, spends the offsets it collects on environmental projects such as the Rarakau Rainforest Conservation Project and the Babinda Reef Project.
Larger organisations that buy carbon offsets include major events such as the Olympics, companies like Google and Disney, and airline Jetblue. All these put together are fuelling a multi-billion dollar business on “saving the planet” by limiting greenhouse gas emissions.
What the experts – and protestors – say about carbon offsets
Carbon offsetting is a means to slow down global warming, but it should not be considered an end solution to the problem. It can only buy more time. Environmentalists generally agree that there are more factors that must be addressed in saving the planet, such as increased social awareness, economic growth, political stability, and technological advancement (without consequences).
Here’s what some environmentalists and activists have to say about carbon offsetting and greenwashing:
James Bushnell, an economics professor at the University of California Davis explains that offsets are vulnerable to manipulation. “There’s always going to be an incentive problem when you pay someone not to do something as opposed to charging them to do something,” he explains.
“And that’s kind of the offset scheme where instead of charging people to emit carbon, for example, we are paying them to not emit carbon.”
He says some businesses in countries like China deliberately increased their carbon emissions so as they could be paid to cut them back down.
“First, the concept of offsetting creates an illusion that high-carbon activities enjoyed by wealthier individuals can continue, by transferring the burden of action and sacrifice to others — generally those in the poorer nations in the southern hemisphere,” wrote Massive Attack’s Robert Del Naja in the Guardian. “Ultimately, carbon offsetting transfers emissions from one place to another rather than reducing them.”
“Since climate change is a global problem, it doesn’t matter where you reduce emissions,” Anja Kollmuss, a policy analyst in Zurich who studies emissions trading, told Vox. “You can reduce emissions anywhere you want and if you have a limited amount of money at your disposal, it makes sense to reduce emissions where it’s cheapest and easiest to do so.”
Jennifer Morgan, who protested inside this month’s COP26 conference at Glasgow, says offsetting “smothers ambition” and gives polluters a way to avoid making genuine, substantive, timely emissions cuts.
“It’s like saying you’re going on a diet but you keep eating cake while paying someone else to eat lettuce,” she added. “Offsetting scams are a potent threat to the climate.”
Also during COP26, Teresa Anderson from ActionAid took the microphone and denounced the offsets Taskforce.
“Carbon offsets mean climate sabotage,” said Anderson. “This initiative is going to cause direct harm to smallholder farmers, women and indigenous communities. Those that have done the least to cause the climate problem, yet are experiencing its worst impacts, are going to be sacrificed yet again.”
In a piece published on Vox, Umair Irfan wrote: “Carbon offsets will not let us buy our way into heaven, but they could slow our descent into hell.”