Carbon offsetting is a shitshow. Should we do it anyway?

February 13, 2020
Sustainable Development Goal
Sustainable Development Goal

I’ll start with it here folks, carbon offsetting is a shitshow. It’s a mess. It sincerely needs unstuffing. And it’s also what we’re aiming toward when we talk about being climate or carbon neutral. It’s what we’re relying on when we feel guilty about taking a flight or running a business. It’s what we need when we’ve reduced as much as humanly possible and can, practically, reduce no more. It’s what countries and companies are constantly talking up in order to reach their goals.

What is a carbon offset then? It’s a way for governments, companies and us individual humans to invest money into environmental projects to balance out the carbon emissions we create (our carbon footprint). These offsets are developed commonly as forestry sequestration projects (where we plant trees to remove carbon from the atmosphere or pay people to keep the forest that was already there, if they were going to cut it down) and can also be energy efficiency and renewable projects (which reduce future emissions) amongst a whole lot more.

The biggest obvious problem with offsetting is that we increase moral licensing and the rebound effects. That is, we might offset once and feel good – whether as a business or individual – doing everything else destructive afterwards. And we might actually increase our carbon footprint precisely because we feel we have – or can – offset it. Carbon offsets could actually increase our resource use (of which we topped 100 billion tonnes last year).

The second biggest problem is that we need to reduce our global emissions 45% by 2030 to meet the Paris Agreement. Trees literally can’t be planted and grow fast enough to reach this goal whilst we stay on course of our current resource use and consumption. Trees also don’t tend to reach their carbon storing potential – sequestering meaningful amounts of carbon – for 15 – 35 years (until they’ve matured). We even often cut them down before they start fully storing carbon.

The third problem is that it’s logical to understand that this isn’t a one-for-one. We often can’t measure emissions entirely accurately (it’s incredibly complicated to work out through supply chains and scopes) so we’re not offsetting correctly most of the time. But more than that, most of us can acknowledge that logging a natural old-growth forest, or drilling for oil isn’t the same as planting a seedling. We’re not undoing the harm we are causing. And we’re not getting results from it. And where is that extra 45% coming from if we’re pretending this is a one-for-one trade?

It’s the worst possible idea, except for everything else. – Timothy Searchinger, Princeton Researcher

Why is it all kinds of stuffed up?

The market

It has been a mess since it started and though there are numerous efforts to clean it up, it’s not there. The clean-up efforts are still going. You could write an entire report on the markets from the three Kyoto mechanisms to the two new markets that are supposed to replace these. For ease, know that CDM, JI, IET and Article 6 were set up officially for countries to use for climate targets and that REDD and many voluntary markets also exist for private companies and individuals.

A 2017 report for the European Commission found that 85% of offset programs for the UN’s Clean Development Mechanism (CDM), which was designed to allow wealthy countries to buy credits in the form of emission reductions from lower-income countries, failed to deliver “real, measurable and additional” emission reductions, and noted that most of the projects would have happened anyway. A study in 2015 found that 75% of the credits from the Joint Implementation (JI) global program did not have meaningful reductions, and that if countries had cut pollution on-site instead of relying on offsets, global CO2 emissions would have been 600 million tons lower.

The CDM is still being discussed. And evaded, including most recently at the gathering of countries at the COP25 in Spain. The mechanism got so off-track from what most of us would understand as its actual goals, that it ended up subsidizing coal plants, including Adani, to burn coal more efficiently. Even more, the CDM lacks basic social and environmental arrangements and has led to human rights violations. It was decided not to alter the article last year and this has now been locked in for nearly ten years when it is next due for review. Whilst Europe doesn’t want the CDM to be kept in place (it already opted out years ago), countries like the US, Brazil, Australia and Saudi Arabia are relying on this in order to meet their goals. It obviously doesn’t need stating that achievements on paper only don’t actually help us halt the increasing contributions to climate change.

It was supposed to be a system to allow countries to set more ambitious targets. But what it actually did is just make it cheaper to reach existing targets and you can even argue that it weakened the targets because instead of really reducing emissions, countries bought credits that don’t really represent much. – Gilles Dufrasne, Carbon Market Watch

REDD, or Reducing Emissions From Deforestation and Forest Degradation is another market, outside of those having been, or being, established. It is another offset scheme established under the UN, but was not designed specifically for meeting country targets under the Paris Agreement. Through this market we can have carbon credits based on the avoidance of deforestation. It’s a hugely problematic market. How do you know for sure what would have happened to the forest in the absence of the credits? How do you measure that accurately? These offsets also need to work for a lifetime of emissions – we have absolutely no way of protecting these areas for just 20 years, let alone 100 which was the suggested timeframe.

In 2015, a French research center examined 120 REDD projects and found that 37% overlapped with existing protected lands like national parks. Carbon offsets require an added benefit, known as additionality, and the authors concluded REDD+ was simply layered onto existing conservation plans.

A recent report from Norway, the largest financial supporter of REDD+ at $3 billion dollars over ten years, stated that “the results of REDD+ to date are delayed and uncertain”, “measurement, reporting and verification of emission reductions as a result of REDD+ is only partially in place”, and “there is inadequate follow-up of social and environmental safeguards as regards indigenous peoples’ rights, poverty alleviation and preservation of natural forests”. It also highlighted one of the big risks with carbon offsets noting that there was a considerable risk of leakage (when protecting one section of land leads to deforestation in another) and that it created “considerable uncertainty over the climatic impact”

We had a couple of REDD projects near us in Cambodia. They did not go well. ProPublica enlisted a satellite imagery analysis firm to review radar data for the 13 sites in-country to determine how much forest remained. Project documents said these areas were 88% covered in forest, on average, in 2008. The analysis in 2017 found they were only 46% forest and one of the protected areas started out as 90% forest is now 0%. One of these was a Virgin project for offsetting.

You may have invested, you may have planted trees, but you haven’t offset until the emissions reductions have occurred and been verified. – Mary Grady, Winrock International

Calculation

Calculating a carbon footprint through your supply chain, or purchase of an item, or use of a product is already extremely complicated. What do you count? What’s in scope? Who is responsible for what? But more than that, carbon offset projects cover a whole array of work. Some plant trees. Some projects are designed to capture methane from landfill. Some get renewable farms up and scaling to switch away from fossil fuels in a local community. Some purchase fuel-efficient stoves for families. Some provide technology or products such as filters so a forest doesn’t get cut down to use the wood for fire for example. Others are stopping people log forests with money.

There are also three types of emissions to calculate. As per the Greenhouse Gas Protocol Corporate Standard…

Scope 1 (direct) – emissions released to the atmosphere as a direct result of an activity, or series of activities at a facility level.

Scope 2 (indirect) – emissions released to the atmosphere from the indirect consumption of an energy commodity.

Scope 3 (other indirect) – indirect emissions other than Scope 2 emissions that are generated in the wider economy. They occur as a consequence of the activities of a facility, but from sources not owned or controlled by that business. For example, the extraction and production of purchased materials, transportation of purchased fuels, use of sold products and services, and flying on a commercial airline by a person from another business.

The best we can hope for is a program that helps the climate in some unmeasurable way. That’s what offsets are. And I think that’s the best of what offsets can be. – Barbara Haya, Carbon Market Research Fellow, University of California

Cost

There isn’t a clear cost to the price of a metric ton of carbon when purchasing offsets. There are trading values. Across the globe, carbon offset prices in the voluntary offset market range anywhere from $0.10 per tonne to $45 per tonne. A 2016 study conducted by Forest Trends’ Ecosystem Marketplace reported that the average price of a carbon offset is about $3.30 per tonne.

Countries price their carbon differently too. Airlines offer all kinds of different costs. So do plenty of places online where consumers can alleviate their purchases. EasyJet recently instituted an option to offset our flights for less than £1 per ticket. I think we can all imagine we’re using plenty more tons that warrant a higher price so I’ll leave that right there.

Double entry accounting

Anyone who has studied Accounting 101 will spot this error from a mile away and it’s a horrible one. International carbon markets don’t consistently practice double-entry bookkeeping. In other words, when a brand buys offsets across country borders, the seller isn’t subtracting what they’ve sold from their country’s total carbon reductions, even though the buyer is adding it to theirs.

That means that if you fly in a plane along with hundreds of other people and the airline wants to offset four tons of carbon they might do this through a project in South America. That project might be drawing about ten tons of carbon from the atmosphere. When the airline buys four tons the project should enter a minus four (-4) in its log since the airline just added a plus 4 (+4) on their side. But often the airline (or company or government) will do that and the project in South America keeps its books exactly the same.

At the recent COP25 Summit, Brazil apparently insisted on double-counting in order to use Kyoto credits to meet its emission reduction obligations whilst simultaneously selling them to third parties.

It’s mathematically crazy.

Tree planting

Ethiopia got busy setting a world record saying it planted an unverified 350 million trees on just one day in 2019. Madagascar is currently in the depths of planting 60 million trees for its 60th year of independence. Australia, the only industrialized country in the deforestation hotspot list, has set a target to plant 1 billion trees by 2030. The Conservative party in the UK committed to planting 30 million trees every year. Canada plans to plant 2 billion trees over ten years. Everybody is tree planting. Trees are – truly – amazing. Scientists have found there are 1.7 billion hectares of treeless land on which 1.2 trillion native tree saplings would naturally grow. But tree planting isn’t always so effective either.

Our native, and natural forests are also home to thousands of unique species. Animals often prefer old large trees for nesting. We need mixed forests not monocultures for sustainable ecosystems promoting biodiversity. It’s also difficult to measure how successful our tree planting events have been. In Madagascar, about 5 tons of seeds in the form of seed balls were dropped from the sky to aid the efforts. Each ball of soil is packed with 25 seeds. The success rate measured in terms of how many seeds survive and germinate is about 60%, according to a pilot project in 2018.

A recent study found that river flow is reduced in areas where forests have been planted and does not recover over a time. Rivers in some regions disappeared completely within a decade. It found that within five years of planting trees, river flow had reduced by an average of 25%. By 25 years, rivers had gone down by an average of 40%. And the rivers don’t recover.

If we also don’t address the underlying reasons of why trees get cut down in the first place – from poverty through to greed – then the planted trees will also simply get cut down. We need to understand the various reasons and then address each one of them in their local context and understanding that our economic context is unlikely to change quick enough. For example, some regions will require payment to maintain and restore the reforested area. Some will require the creation of natural services in the area to make the restoration economically productive (such as ecotourism). If we’re talking about Rosewood for example, we would need major cultural shift of wealthy Chinese to stop the largest demand for this valuable tree. Other regions will need an alternative source for cooking.

There are also just-as-effective, if not more effective, options to meet our targets – like carefully restoring our mangroves and sea kelp. And more importantly, we need to do everything in our power to keep the forests we already have. No more deforestation. We need to get far better at determining where we do tree planting too. A recent study showed it was more effective to plant on previously degraded land by agriculture for example.

UN Environment supports carbon offsets as a temporary measure leading up to 2030, and a tool for speeding up climate action. However, it is not a silver bullet, and the danger is that it can lead to complacency. – UN Environment climate specialist Niklas Hagelberg

More effectively than anything at the moment is of course to put a price on carbon. And unfortunately, one that is higher than most countries have at the moment if they have one.

Carbon offsetting is complex and madness for us as individuals to work out, verify and monitor. It’s difficult even for the most resourced companies in the world to effectively undertake and continue to monitor. We may be the ones ultimately demanding most of the services in the world, but we don’t demand them to be the most environmentally destructive, and we rely on companies and governments to make better decisions, to help guide us, and to be incentivized to do so.

Suffice to say, the road to climate hell may be paved with baby trees.

There has not been one forest offsetting project that we have found that has been able to provide the long-term, verifiable emissions reductions without negative human rights impacts. Not one. – Dr. Moas, Greenpeace

To make offsetting better:

  1.  It needs to be permanent.
  2. It needs to be in the right location.
  3. It needs to be a true additionality (the benefit from doing this project wouldn’t have happened / been realized without the offset).
  4. At this point, it needs to be doing more than offsetting – it needs to be accelerating change.
  5. It needs to be completely, and utterly transparent.
  6. It needs accurate impact measurement.
  7. We need legal, verified, and practised auditing, and enforceable regulations that have consequences.
  8. We need to figure out the best style of projects – for example, regenerative agriculture might be far more effective long-term.
  9. We need to work far more effectively with Indigenous peoples and providing their land rights, who have proven time, and time, and time again to be more sustainable managers of the land, decrease deforestation and even reduce emissions.
  10. We need to incorporate the needs of local people and their access and use of the area.
  11. We need to take into account leakage (if we pay the offsets to save Farm A, but then Farm B gets logged when it wasn’t going to be before, we haven’t made any net benefits).
  12. We need transparency in our supply chains so we can calculate our footprints correctly in the first place. We work with some businesses to help this process and it’s an absolutely minefield. We need to be pushing this upstream on, and on, and on, to the original resource procurer so that each level of the chain can then calculate and pass on their calculations.
  13. We need to look for unsexy projects. We have a real problem in charity, environmentalism, design, innovation – anything in those spaces to work on “unsexy” issues. It’s often hard to get funding for them, to get the best brains on them and it’s ridiculously difficult to market them (or get others to). But unsexy projects help. Industrial heating is a massive problem and needs to be solved. Unsexy carbon offset projects also might work better than planting trees in some regions. For example, Nature Energy separates out manure solids on their farm in their offsetting project and delivers what seems to be a reliable offset. It’s not an easy sell but it’s worth finding and verifying these.

Should you offset?

It’s a bit like recycling at this point. It makes you feel a bit better. Much of the time it probably doesn’t work (country dependent) but some of the time it does. A small portion of the time it’s truly incredible. If you’ve got the time, you’re reducing your consumption, you’re calculating your footprint and are willing to pay a price for it,  do intensive research on your offset project and ensure they’re transparent and have certifications from the Gold Standard. That’s worth doing if you put the research into it and reduce your consumption as much as possible first. Or, find an awesome regenerative farm or local business near you that’s creating truly effective, and measurable change, and donate the money there as your offset. You’ll get an extra kick out of it too – and can actually visit it! For the record, I still offset any flights even though it may not be helpful, and we’re still exploring ways to be offsetting transparently and effectively as a small social enterprise having reduced everything else. This stuff is really complex.

More importantly is that companies and governments needs to be doing a much, much better job at this and become far more responsible for effective implementation and monitoring; they have the resources to do so and have far larger targets and pledges to be meeting.

Final note: Offsetting and Emission Trading Systems (ETS) also known as cap-and-trade schemes, do not work the same way. Global carbon markets have mostly been offsetting mechanisms and that’s what is covered here.

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Written by Lis Dingjan

Lis is the founder of Nowhere & Everywhere. With a background in law, international development & service design, she is a passionate advocate of human rights, climate justice, eating from the ground, exploring deeper, giving back a little more than you take and designing better systems. Lis spends a significant portion of time in the field in rural Cambodia.

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