Does Carbon Offsetting Really Work?
Myths and Facts of Carbon Metrics By Santeri Lehtonen
“Offsetting”, “voluntary carbon markets”, and “Net Zero” have become popular terms thrown around all major markets, including the art market. Though it must be stressed that all efforts to help create a greener economy are worthwhile, it’s important to dig deep and set our bar as high as possible when it comes to making the world a better place. And so what is the technological and regulatory background behind carbon metrics and offsetting projects, and more importantly, how much can they be trusted to present long-term solutions to sustainability and global inequality, as opposed to being mere PR - fixes?
What is this whole carbon business about?
For better or for worse, carbon dioxide has become a new buzzword: you can’t turn on the TV or have a conversation about current issues without the term clawing its way into the topic. It keeps popping up, not just when talking about climate change, but in any regular discussion about anything between cars and pets, the future of NFTs, or global strong-man politics and children. In a sense this is crucial, because as a global society we urgently need to address how to cut global carbon emissions to avoid seriously catastrophic impacts of climate change. But how exactly did we get to the “Era of Carbon” ?
In the third ever Conference of the Parties of the UNFCCC (COP3) the signatories from various countries agreed to use carbon dioxide equivalents (CO2e) as the metric to report all of their greenhouse gas emissions. This method originates from the IPCC (Intergovernmental Panel on Climate Change), consisting of some of the best climate (and other) scientists in the world. The method uses the Global Warming Potential (GWP) of different gases to standardise and aggregate them under a single metric over a set timeframe (most commonly 100 years). ‘Carbon’ then became the shorthand for ‘CO2e’ which in turn encompasses various types of gases. Although this is a practical approach, it is also reductive to the complexity of how different types of gases behave in the atmosphere and in particular ecosystems. The basic measurement for carbon emissions is founded upon global abstraction, and oversimplification, which further muddies the waters of offsetting and the future of global climate action.
The basic measurement for carbon emissions is founded upon global abstraction, and oversimplification, which further muddies the waters of offsetting and the future of global climate action.
Now that all countries’ emissions accounts were conveniently described in terms of simple metric terms, it was the time for the market to move in. The start of the 2000s is also roughly when the old tactics of active denialism start to slowly give space to the era of carbon, creative accounting and fake action. Carbon accounting is also at the centre of many of the problems that come with “carbon offsetting”. Carbon offsetting is the concept that greenhouse gases (GHGs) emitted in one place can be compensated by preventing or sequestering the equivalent amount of GHGs somewhere else.
All carbon offsetting comes with quite a few assumptions: 1. original emissions and 2. emissions reductions can always be measured and are reported exactly; 3. those emissions are truly equivalent; 4. offset project would not have happened otherwise; 5. emissions reductions are permanent; 6. no other negative impacts (social, environmental) arise, or ignoring them is fine with everyone. Each assumption adds a chance to either accidentally, or intentionally, misplan or miscalculate the carbon accounts and impacts.
Carbon offsetting is the concept that greenhouse gases (GHGs) emitted in one place can be compensated by preventing or sequestering the equivalent amount of GHGs somewhere else.
In summary, somewhere during the attempt of crafting global rules for emissions accounting, they became to resemble solutions for an engineering problem or even more so, a business problem than a socio-ecological one. Furthermore, in their quantitative and linear manner, they unfortunately paved the way for carbon offsetting and other market logic to move in.
How and by whom is carbon offsetting being used?
Since carbon offsetting is such a perfect fit for the neoliberal mindset and the tech-saviourism narrative prevalent in “green” free market capitalism, it is becoming extremely popular amongst corporations and individuals alike. Carbon ‘disappearing’ from individuals’, governments’ and companies’ footprints follows the hypothetical logic of offsetting. All manner of companies and products have recently declared themselves “carbon neutral” or “Net Zero by 2050”: from Big Oil & Gas, through plane tickets, to cryptocurrencies.
Since carbon offsetting is such a perfect fit for the neoliberal mindset and the tech- saviourism narrative prevalent in free market capitalism, it is becoming extremely popular amongst corporations and individuals alike.
The fact that “Net Zero” is so hot within the corporate-world reflects how companies sense the genuine global concern for the climate crisis. As a response, they engage in various efforts to maintain their reputations and profits, while escaping regulation. Let’s look at a hypothetical example: two businesses both set their Net Zero targets to 2050, with 60% reduction by 2030. The first uses direct emissions reduction in their supply chain by substituting energy mix and materials, attempting to treat the problem at its source and gradually implement a sustainable alternative. The other buys heaps of land from some other rich guy in exchange for biological Carbon Dioxide Removal (CDR), i.e. tree planting (CDR also has many other forms, as illustrated below). Clearly the former is a genuine effort, whereas the latter just a bandaid on an open fracture (read: greenwashing), serving nothing but short-term PR interests, and banking on free market capitalism and technology to win the race between humankind and the ecosystem without considering any possibility for systemic change in how we approach the resources and social formations on our planet.
We should be more concerned with cutting the use of fossil fuels (and their subsidies) than creating new marketplaces full of endless smoke and mirrors. Photo: Unsplash
In order to set a real difference between these two cases, avoid the blurred lines of the free market and start creating lasting change for the better, we need to understand and write into policy the differences between different Net Zero claims. For example, we need to clearly separate Carbon Removal Targets from emissions reduction goals (as highlighted by this brilliant Greenpeace report) and stress that all different targets should be able to coexist. The latter point is important among other reasons: at present the combined ‘Net Zero’ efforts of ENI (fossils) and IAG (aviation) alone would take up 12% of available land for tree planting (the only carbon offsetting option at such scale). It becomes apparent then that if we implemented all reforestation projects required to offset even a fraction of private sector emissions, we’d simply run out of land. What’s more, most big companies do not have much to back up their Net Zero claims, and have a history of missing similar targets in the past; like the 2014 goal to stop deforestation by 2020 (annual tree cover loss rate has in fact increased by 43% since).
We need to understand and put into policy the differences between different Net Zero claims.
Now let’s look at how individuals implement carbon offsetting in their daily practices and consumer habits. Say you want to put money to a certified offsetting project, and choose a reforestation project as trees tend to be the go-to symbol for climate action. In fact a popular majority of voluntary offsets come from Afforestation and Reforestation (AR) projects. But as with all offsets, AR projects have a set of (intentional or unintentional) problems in actually sequestering carbon:
- carbon sequestration capacity is often overestimated (optimism is rife, and trees and plants don’t suck down as much carbon as previously estimated);
- it’s easy to fail the CDM principles of additionality, permanence and leakage (offsetting project would have been implemented without carbon credits, trees burn down releasing their carbon, and/or project inadvertently causes emissions somewhere else)
- overall, best practises and local knowledge are often ignored (especially large scale projects tend to steamroll over nuances, local context and be single-mindedly carbon credit obsessed)
At best this leads to more emissions that are sequestered by the trees, at worst double counting leads to double the emissions, bad management leads to human rights abuses, loss of biodiversity, palm oil monocultures, soil degradation and worse.
While it might not always be actively harmful to spend money on carbon offsets as a form of charity, they do not buy you the right to pollute.
How can we as mindful citizens and consumers then know which offsetting project to trust? An effective practise is to go to a trusted certifier’s marketplace. One of the more prominent ones is the aptly named “Gold Standard”. Gold Standard aims to ensure that carbon credits are all shiny, ethical and good to go. However, their own Chief Technical Officer Owlen Hewlett has come out expressing his worry about the future of the Voluntary Carbon Market (VCM), and the private-sector led "Taskforce on Scaling Voluntary Carbon Markets" (TSVCM) especially: “Without integrity, voluntary offsetting is not just less effective; it has the potential to be actively harmful.”.
While it might not always be actively harmful to spend money on carbon offsets as a form of charity, they do not buy you the right to pollute (as is true with governments and corporations). Similarly, buying products and services labelled as ‘carbon neutral’ or ‘compensated’ is not necessarily a good indicator of the actual sustainability of said product. The European Commission is currently only just drafting legislation concerning using such claims and labels.
Why are the uses of CDR problematic?
In summary, carbon offsetting through CDR might be better than nothing, but we could do better. The problem is that the system is essentially in the hands of the free market, and therefore cannot unfortunately be fully trusted. To be clear: CDR comes in many forms: Bioenergy with Carbon Capture Storage (BECCS), tree planting (AR), Direct Air Carbon Capture & Storage (DACCS) and so forth. Everyone has their favourite, but none of them are extremely great, as illustrated by this matrix:
Carbon Dioxide Removal is not best achieved through offsetting projects funded by the free Voluntary Carbon Market - instead, there is an urgent need for better international law and regulation.
In my personal opinion, it’s becoming clear that CDR can only play a minor role in mitigation, and is definitely not a viable alternative to emissions reduction. However, that minor role can in fact be very important in actually achieving Net Zero, together with ambitious and rapid mitigation (see different scenarios on page 12 of the Greenpeace report). Carbon Dioxide Removal is not best achieved through offsetting projects funded by the free Voluntary Carbon Market (VCM) - instead, there is an urgent need for better international law and regulation. To clarify: CDR projects not funded via VCM do not buy the right for equivalent emissions elsewhere and are therefore much less problematic. Whatever the case, rules and certification need to be clear, and the price per ton of carbon high enough that there’s money for proper long-term governance: establishing resilient systems to ensure effectiveness (permanence and additionality), monitor real-life effectiveness, and minimise negative impacts (social, political, biodiversity, political 2, 🔥).
The majority of the solution to the climate crisis is reducing emissions significantly, even if carbon offsetting worked as promised.
As I mentioned in my introduction to carbon, accounting for emissions as ‘CO2 equivalents’ in the case of offsetting are abstract measurement in line with a capitalist approach to reduce complex socio-economic phenomena into easily quantifiable (and thus marketable) units, not unlike, for instance, GDP (Gross Domestic Product), which equally hardly succeeds at providing a complex economic profile of a given country (as pointed out by Camila Moreno in her article for Open Democracy).
We know that official carbon credits systems, like the United Nation’s CDM, do not necessarily deliver what they promise. We also know that offsetting is used to sell hollow promises of climate action to both companies and individuals, without necessarily delivering results. This is the real danger of popularising and scaling up market mechanisms without significantly restricting and regulating them: they give false hope and create a narrative where emissions removals are just as good as emissions reductions (such as not burning fossil fuels anymore). It’s important to remember that the majority of the solution to the climate crisis is reducing emissions significantly, even if carbon offsetting worked as promised.
It’s counterproductive in many ways to let society put their whole trust in the effectiveness of offsetting and similar mechanisms, because it’s the easy way out. We need to be pushed to fundamentally reconsider our financial systems, how we manage our resources, organise our societies, and most importantly to think in terms of global interconnection and inter-responsibility both vis-a-vis fellow humans and non-humans. Carbon offsetting and its distinct features of quantifying and simplifying complex issues, exploiting a power differential and transferring burden from the Global North to the Global South, is very much in the tradition of colonialism (it's even been called carbon colonialism by researchers). Our climate crisis needs to be contextualised within a globalised system of exploitation originating from the inequalities created by colonial history that are continually proliferated into the present. An organised global response and respective policies need to take this into account - for it to be left ignored will only lead to further injustice and exploitative logic within existing power structures. Relying strongly on Voluntary Carbon Markets contributes to a fundamentally anthropocentric and neoliberal approach to our ecosystems instead of appreciating the intrinsic value of nature, other ways of knowing and working with local contexts towards sustainable solutions.
As of now, the demand for carbon offsets is skyrocketing, with an unreliable supply and elusive regulations. We will probably be seeing further scandals, tug-of-war on regulation and debates about the real nature of big scale CDR projects.
We need to be pushed to fundamentally reconsider our financial systems, how we manage our resources, organise our societies, and most importantly to think in terms of global interconnection and inter-responsibility.
But don’t start remodelling your office into a doomsday bunker yet. There’s an emergence of good conversations, oversight and criticism towards the tactics many corporations are tempted to employ. Additionally, carbon capture by oceans and soils through conservation and regeneration can lend us a big hand.
So if it’s not Big Oil or space-daddy’s USD 100 million carbon capture tech prize that will fix all of our problems, then what will? I’ll give you three suggestions:
- Separate CDR targets from emissions reduction goals: make a transparent distinction between Net Zero targets fulfilled with external forestry offsets (e.g. 95% of British Airways’ carbon ‘reduction’ goal) or cutting supply chain emissions by 100% through renewable energy (e.g. Unilever).
- Don’t let offsetting become the primary Corporate Climate Action strategy: Not only do large forestry projects come with a heap of externalities, they can also only absorb enough carbon to get us down from the most hard-to-cut emissions. There’s just not the land. Just one major company can take ~6% of the 2050 forest carbon removal budget.
- Protect rights of local and indigenous communities: you’ll conserve primary forest, and you’ll have the best monitors and stewards of the ecosystem, and you’ll decrease your chances for exercising carbon colonialism. Working with local knowledge and ecosystems as opposed to principles of global abstractions can lead to more sustainable practices.
Stay critical out there!
Bloomberg Green dedicated their Winter 2020 Issue to the dangers of phony forestry carbon offset projects, calling it “The Money That Grows on Trees”. Two articles from that Issue can be read free:
- Ben Elgin: “These Trees are not what they seem”
- Ben Elgin and Zachary Mider: “The Real Trees Delivering Fake Corporate Climate Progress”
- Greenpeace’s “Net Expectations”
- The World's “Global demand for carbon offsets to combat emissions is growing — but the supply is unreliable”
About the author:
Santeri Lehtonen is a climate impacts consultant and activist, working in the fields of impact measurement and strategy.