Carbon Offsets... What's the Fuss About?

Carbon offsets have begun to take new meaning as part of the net zero lexicon. Once seen and lauded as a sure-fire route to net zero emissions, offsets have come to be referred to by many as ineffective and only of use to organisations who are interested in propping up an inflated image of social goodness (or in more common parlance, greenwashing)

Dr Tobi Elusakin

5 min read

body of water near bridge
body of water near bridge

Introduction

Carbon offsets have begun to take new meaning as part of the net zero lexicon. Once seen and lauded as a sure-fire route to net zero emissions, offsets have come to be referred to by many as ineffective and only of use to organisations who are interested in propping up an inflated image of social goodness (or in more common parlance, greenwashing). In my opinion, carbon offsets are somewhere in the middle. While the priority when planning and executing one’s way to net zero should be carbon reduction, complete reduction is not yet realistically possible, leaving offsetting as a tangible approach for mitigating the effects of our inevitable activities.

What is a carbon offset?

Broadly speaking, a carbon offset is an instrument for reduction in anthropogenic greenhouse gas (GHG) emissions which is used to compensate for emissions which occur in a different location. For example, planting trees to absorb carbon from the atmosphere in which they are grown or preventing deforestation. Organisations and individuals are able to engage in offsetting activities by purchasing independently certified or government-issued tools called offset credits which are transferrable. A credit in this case represents a reduction of one metric tonne equivalent of CO2 (tCO2e). Offsetting should be done following the accurate measurement of carbon footprint and the reduction to lowest possible levels. It forms the final part of the 3-stage Climate Neutral Now process under the UN Framework Convention on Climate Change (UNFCCC) initiative.

Types of carbon offset projects

There are four main types of carbon offset projects. These are generally known as biosphere-based carbon offsetting, or Natural Climate Solutions (NCS). They are the most popular and therefore the cheapest.

  • Renewable energy - This involves supporting the development and maintenance of renewable energy generation (i.e., wind, solar and hydroelectric energy) all over the world. This is usually done in developing economies as it helps decarbonise the electric grid, provides jobs, and helps reduce reliance on fossil fuels. There is another side to this coin, in which some of these types of offset projects involve wiping out local communities or harming local wildlife.

  • Waste to energy - This involves the capture of methane from landfills or human or agricultural waste and its conversion to energy. Methane (CH4) is one of the listed greenhouse gases on the Kyoto protocol and can therefore be converted to save tonnes of CO2e.

  • Forestry and conservation - Quite popular as an offsetting instrument, credits with forestry and conservation are created based on the carbon captured the planting and growth of new trees or the carbon captured and not released through the protection of old trees. Many offset schemes actually focus on the latter as it has more immediate impact than planting new trees. This type of offset project is also quite valuable because of the other benefits it offers beyond just the credits. Being able to claim the protection of eco-systems, wildlife, and social heritage is quite valuable to the CSR/ESG ideal of many organisations.

  • Community projects - Community projects are usually smaller in size and scale but can provide benefits which are more than just the credits they generate - they provide tremendous impact on local communities. Examples include introducing energy efficiency processes or technology to developing communities, or projects to provide sustainably clean water, helping them become more sustainable and providing empowerment which can lift them out of poverty.

The corporate gold rush of carbon credits

It is often said that given enough time, nothing (good) lasts. This seems to be the opinion of a few critics when it comes to carbon credits. Over the past few years, the market for carbon credits has increased dramatically, with Ecosystem Marketplace valuing voluntary carbon markets at $1b in 2021.

Seeing this, it is hard not to be a sceptic with regard to the claims which companies proudly make on offset projects which their fledgling CSR/ESG departments have funded. While the claims of carbon offset are largely accurate and verified, there is a sense that they are being done as a substitute for more effective action, such as ensuring as little emission as possible in the first place and engaging in genuine carbon reduction activities. Large organisations have come to either propose offset programs in which people can just pay for credits and not change their behaviour, or themselves pay for offset credits so they can undertake activities which would lead to significant emissions. The issue here being that emissions which do not occur at all are more preferable to those which occur and are offset.

Offset Certification Programmes

Offset projects cannot be recognised without verification. The two ways to do this are through government-backed emissions reduction projects or through independently-audited standards. The most common standards offsetting projects adhere to include:

  • Gold Standard - The Gold Standard ensures that offset projects are independently reviewed to make certain that emission reductions claimed by any project are “real, quantifiable, and additional”. Gold Standard also ensures projects meet high standards for sustainable development in the local area in which it is situated.

  • Climate, Community, and Biodiversity Standard (CCB) - This standard identifies projects that simultaneously addresses climate change, support local communities, and conserve biodiversity.

  • Verified Carbon Standard (VCS) - Similar to Gold Standard, the VCS produces a framework and independently audit projects to ensure that individuals or organisations purchasing offset credits are in fact supporting projects which offset emissions.

  • The Woodland Carbon Code (UK only) - This is an official tree planting-based scheme for UK companies that want to support UK based tree planting. The not-for-profit Trees for Life use this to enable official offsetting as part of supporting their re-wilding projects in the Scottish Highlands. While these projects can be more expensive than others, organisations like to support them in their country or region due to the added benefit of improving biodiversity.

Popular carbon offset providers

There are a number organisations which provide carbon offset opportunities which adhere to the standards previously enumerated.

What should we focus on instead? - Carbon offsetting by Direct Air Capture

It is widely believed that a key part of ensuring the planet gets to net zero quickly is to scale up scientific direct air capture (DAC) projects. Direct air capture (DAC) technologies can extract CO2 directly from the atmosphere. This CO2 can either be permanently stored in deep geological formations (thereby actually achieving carbon removal) or it can be used in manufacturing or combined with hydrogen to produce synthetic fuels. Carbon removal will be key in the transition to a net zero system in which the amount of emissions released is equivalent to the amount being removed. Because certain industries such as aviation are inherently difficult to decarbonise, carbon removal technologies can offset their emissions and support a faster transition.

Some advantages of DAC include the limited land and water footprint it requires and the viability of situating CO2 processing plants on non-arable land close to suitable storage, eliminating the need for long-distance CO2 transport. The choice of location also needs to be based on the energy source needed to run the plant. If DAC can be taken to commercial viability, it represents the best and most efficient technological chance to offset the carbon being emitted.

Some DAC offset providers include:

Conclusion

Offsetting, and the choice to do it, should be simple. But much like anything relating to the net zero movement, it is more complex than it appears. It is important to note that in the journey towards zero emissions, avoiding and significantly reducing carbon emissions should take precedence over offsetting. Alas, we still need to work and live and the activities that accompany both these things today inevitably emit carbon and will do so for the foreseeable future. So whatever emissions we cannot avoid, or reduce, we must offset.

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