Carbon Offsetting: The Myths, The Truth

Fireworks fizzed across the sky as half a million people celebrated Brisbane’s Riverfestival last September. Then came a deafening roar. An Australian air force F-111 swooped over the revellers, jettisoned most of its fuel and ignited it, leaving a stream of flame hot enough to be felt below. Cheers went up as the DJ announced the completion of the evening’s highlight, a “dump and burn”. Later, the festival organisers announced that 300 trees had been planted outside the city to soak up the estimated 68 tons of greenhouse gases released by the stunt: dump, burn and offset.

There are no widely accepted standards as to what qualifies as an offset. Moreover, many retail offset marketers provide little information about where the money is being spent or what criteria are used to select the reductions they sell.

Official offsets, sanctioned under the Kyoto protocol, controlled by tight rules and a complex bureaucracy, allow governments and companies to earn carbon credits that can be traded. Then there is the burgeoning unofficial sector, an army of charitable and profit-making bodies that charge a fee to organise offsets on your behalf. Dozens of organisations across the developed world sell voluntary offsets, a business that is ever growing. Simply go online, calculate your emissions from flying, running your car or running your life and cleanse your environmental sins at a click of the mouse.

The answer is a resounding maybe. According to a study managed by offsets expert Mark Trexler: “There are no widely accepted standards as to what qualifies as an offset. Moreover, many retail offset marketers provide little information about where the money is being spent or what criteria are used to select the reductions they sell.” This market in environmental absolution is remarkably unregulated and secretive. The lack of transparency means it is often impossible to be sure that money invested in carbon offsetting makes the difference that is claimed for it. Most offset marketers do not make clear that the offset will usually accrue only over many years, during the growing period of the tree or the working life of the energy project your money went towards. (This is unlike Kyoto projects, which have strict time criteria.) Few offer customers the chance to invest in specific projects and follow their progress. Among other things, this leads to the possibility that offsets might be sold more than once, says Trexler.

The uncertainty starts at the first click. When I tried to find out how much CO2 I was responsible for after my return flight from London to Brisbane, the three companies I chose at random came up with three different answers and three different prices. Tree plantations account for most of the voluntary offset money spent so far, greening an estimated four million hectares. The F-111 in Brisbane released its emissions in less than a second, but the trees planted to offset it will reabsorb CO2 only gradually, over about three decades—if all goes well. And it may not. All around Brisbane at that time, trees were dying in one of Australia’s worst droughts. Even successful trees do not live for ever. Eventually they die, rot and yield up their carbon. Future generations may not thank us for our forest offsets. What are the alternatives?

For most offset companies, plan B is to invest in green energy projects, such as wind turbines, solar panels and energy-efficient light bulbs and cooking stoves. But many countries are already reducing their reliance on fossil fuels and adopting energy efficiency as a matter of course, so offsetters have to demonstrate that what they are doing is additional to that. This “additionality” is key.

A consortium of environmental groups, including the World Wildlife Fund, has now set up a certification scheme called the Gold Standard. It has made inroads in the official Kyoto sector and introduced a simplified version for the voluntary sector. One sensible test applied by the Gold Standard is to ask if the offset project makes economic sense in its own right, regardless of environmental benefits. If not, then the chances are it would not have happened anyway and therefore qualifies as “additional”. But this also means that the projects where it is easiest to demonstrate additionality are also the most expensive and so probably the least cost-effective.

Another approach is to find cost-effective projects that are stuck for want of capital. Climate Care, based in Oxford, funds many small-scale energy projects among poor communities in developing countries, such as providing cleaner-burning cooking stoves in India. “It’s better to stop pollution rather than soaking it up later,” says Climate Care’s Michael Buick, preferring to invest in energy-saving rather than forestry. Yet even these schemes are controversial.

Many governments in the developing world worry about the probity of letting rich nations carry out carbon offsetting in their countries—they call it CO2lonialism. Countries such as India, China and Brazil will have to accept their own limits on emissions. Efforts to portray offsets as simple, quick fixes pose serious questions of both commercial and ecological legitimacy. Sceptics argue there is no substitute for cutting emissions. For them, “dump, burn and offset” is the worst possible outcome. And buying an offset implies a degree of certainty that we do not have. At the very least there is an urgent need for regulation so people can be sure that the way they offset is actually making a difference. shutter