Is Carbon Offsetting a Scam?
By: Alex Hureau
Tags: Carbon Capture, Climate Action, Sustainable Development, Environment, Sustainability

Is Carbon Offsetting a Scam?

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It’s easy to see why there is a large debate around the idea of carbon offsetting. You can continue to drive your car, but now you feel good because ‘someone’ is planting a tree. You can go on holiday by plane, but now wind turbines will be built somewhere. Companies continue with their carbon emissions, but can now buy the right to emit more through the Clean Development Mechanism (CMD). A lot of it looks and sounds so similar to some of the greenwashing hogwash that companies throw our way all the time that it’s hard to take carbon offsetting seriously. Can you expect a few trees planted halfway around the world to make a real impact?

Well, as it turns out, while carbon offsetting does have the potential to make a positive impact, it’s far from being always the case. However, like it or not, carbon trading is here to stay. Thankfully, by avoiding certain pitfalls we can improve the odds of choosing the right project, and make it likely to have a positive impact. Carbon offsetting also has the benefit of being highly scalable. A company could decide to carbon offset all of its flights, much like an individual could choose to compensate for the shipping of their online purchases. As such, let’s take a look at some of the problems with carbon offsetting, what factors can lead to a positive impact, and why some care is needed when choosing which offsetting scheme to go with.

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Project types

While many people probably associate carbon offsetting with tree planting, many projects actually have a completely different focus. In fact, for the purpose of discussion, we can divide projects into two categories:

Projects that focus on carbon capture

Projects that roll out clean technologies

Projects focused on carbon capture hope to mitigate carbon emissions either by trapping it at the source, or by capturing a similar amount of carbon emissions. Today, tree planting represents the bulk of the first category, but one day carbon capture technology could make a noticeable impact.

The second type of project aims to promote initiatives that will reduce the overall impact humans have on the environment, such as by financing solar panels and biogas electricity. The idea is that if you create an overall reduction in carbon emissions, then you can think of your emissions as being neutral.

It’s worth noting that some initiatives actually focus on other aspects of sustainability, such as providing clean drinking water and improving biodiversity. These have their own merits, but the focus here is on carbon offsetting to combat climate change. Similarly, the CMD allows companies to purchase carbon emission allowances from other companies that haven’t reached their quota, but this text focuses only on projects that compensate for carbon emissions.

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Problems and pitfalls

Additionality

There are a variety of potential issues related to carbon offsetting, but the main one by far is the lack of additionality in projects. Additionality means that a project financed or supported by carbon offsetting only takes place because of the carbon compensation, and would not take place otherwise.

An example of a lack of additionality can be seen if we look at light bulbs. Many countries have now banned incandescent light bulbs in favour of more energy-efficient halogen and LED lights. A carbon offsetting project aimed at financing the replacement of incandescent light bulbs in these countries would have a low level of additionality, meaning that this change would have happened anyway.

Projects with low additionality have been so common over the years that a 2016 report estimated that only 2% of the projects they surveyed had a high likelihood of ensuring environmental integrity, with 85% failing to produce any meaningful impact in terms of carbon capture. There are now laws being put in place to ensure this doesn’t happen as often anymore, and there are many ways in which projects can be evaluated, but it remains a major problem. It sounds nice when carbon offsetting provides financial support for new solar panels, but if these would have been put in place anyway, financing them is not compensating for any carbon.

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Implementation and oversight

The next issue with carbon offsetting is the poor implementation and oversight of projects. The band Coldplay made headlines some years ago by attempting to plant 10,000 mango trees to offset the production of its upcoming album. To do so, it partnered with a company called Future Forests (now CarbonNeutral), which, in turn, tasked a tree planting group called Women for Sustainable Development with doing the actual planting of the trees and ensuring they survived. Along with helping reduce the environmental footprint of the band, it was supposed to help impoverished local people.

Of the, at most, 8,000 trees that were distributed, only some survived. Of the money that was supposed to support the care for the trees, almost none was distributed. Of the water and support that was promised, none was given. The initial intentions were good, but the lack of oversight and follow-up led to poor results, a common problem for many projects. Unfortunately, most of the money probably got lost along the way to the people who actually needed it. See, carbon trading is a very lucrative business, with the market being valued at 144 billion euros (US$ 174 billion, £131 billion) in 2018. As such, there is a lot of money to be made in selling carbon offsetting projects, but not as much in ensuring that these projects reach completion and continue to perform over time.

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Habits and consumerism

Finally, there is the fact that we are using projects that will take decades to compensate for our bad habits of today. A tree won’t reach its full capture potential for decades after being planted. A solar panel will take a long time to compensate for the emissions caused by its manufacturing. Carbon offsetting is sold as a miracle cure to unsustainable practices, but the hard truth is that we can no longer afford to wait decades for the positive impacts to be felt. The solution to the polluting impact of flying is not carbon offsetting, but instead not to fly.

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How to choose?

There are many, many aspects to carbon offsetting, and it’s not possible to get into all of them in one short article. Yet, most of the issues outlined are applicable to most of the carbon offsetting projects and should help decide what they want to support. Hence, if you or your company cannot avoid emitting carbon, there are two questions you should ask yourself in regards to the project you are considering:

Does the project contribute something new that would not have happened without this financing?

Does the organization or company in charge of the project have a track record of ensuring their ventures reach a positive outcome over time?

The first should help you determine additionality, whereas the second gives an impression as to the potential implementation and oversight. If carbon offsetting is your last resort, then at least you’ll know you’re on the right track to making it beneficial to the environment.