Pros and cons of carbon offsetting

Carbon offsetting has become a hot topic amid the global push to tackle climate change.

Allowing businesses, governments and individuals to invest in schemes in a bid to balance out their own emissions, carbon offsetting is now “one of the more popular, and more controversial, tactics to limit greenhouse gases”, said Vox.

Companies ranging from Amazon to Shell and countries including the UK and Norway are buying carbon offsets in a bid to “help provide the ‘net’ in their ‘net-zero emissions’ goals”, the news site reported.

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And holidaymakers are also embracing offsetting as “a route to guilt-free flying”, said Reuters. But critics are questioning whether the practice really is “a route to emissions reduction”. Here are the arguments in favour, and against.

1. Pros: funds projects

When “done right”, carbon offsetting could “inject huge sums into underfunded climate solutions”, said the Financial Times. Writing for the World Economic Forum, Bronson Griscom, senior director in natural climate solutions at Conservation International, highlighted several “success stories” of projects that have benefited as a result of offsetting.

These examples included a scheme that reduced reforestation in an area of the Peruvian Amazon by 75%, resulting in the equivalent carbon emission avoidance of “taking more than one million cars off the road each year”.

The Costa Rican government also generates $30m a year for forest conservation through carbon credit sales, which has helped to conserve millions of acres of forests.

2. Cons: ‘flawed’ estimations

Calculating emissions and carbon footprints is “a complex and flawed process”, said The New York Times. “At best it provides an estimate, usually reported as kilograms of carbon dioxide equivalents.”

Even if these estimates are accurate, offsets are “a super-murky world without a whole lot of oversight”, according to Jamie Alexander, director of Drawdown Labs, a nonprofit that works with tech companies on climate solutions.

Greenpeace concluded that “the big problem with offsets isn’t that what they offer is bad – tree planting or renewable energy and efficiency for poor communities are all good things – but rather that they don’t do what they say on the tin.

“They don’t actually cancel out – er, offset – the emissions to which they are linked.”

3. Pros: technological developments

Criticism of carbon offsetting is nothing new, but companies are working to address efficiency and transparency issues through new technologies. Patricia Wyllie of Founders Intelligence, writing for medium.com, said these innovations provide the necessary solutions to make offsetting “a real tool to transition us” to more sustainable systems.

Wyllie highlighted that some companies are using GPS to track and monitor tree planting and deforestation, while others are working to incentivise local communities to help with offsetting projects by providing reliable incomes and planning for reforestation through drone use. Direct carbon capture technology (DCC) is also an emerging solution.

4. Cons: lack of regulation

There is “no requirement” for people purchasing carbon offsets to disclose “who is using offsets, and how many”, said the Financial Times. The system is “voluntary and unregulated, unlike compliance markets such as the EU’s emissions trading system”.

A report from investment bank Credit Suisse earlier this year described the voluntary market as a “wild west” with “poor transparency” and “low (if any) correlation between price and credit quality”.

Former governor of the Bank of England Mark Carney has said there is “lots of bad” happening in the system, which “does actual harm”.

5. Pros: one of many solutions needed

In response to a report published by the Intergovernmental Panel on Climate Change in April this year, Green Party MP Caroline Lucas said that “there’s no silver bullet to tackling the climate emergency”, but there are “an array of effective, realistic and genuine solutions at our fingertips”, including “reversing the depletion of our natural world’s carbon sinks”.

Carbon offsetting may be one of many solutions needed to tackle climate change, and its effectiveness could be boosted through further investment in DCC and other carbon-mitigating measures.

6. Con: doesn’t always add something

Independent investigative news site ProPublica said that any true test of effective carbon offsetting centres around so-called “additionality”. The alleged environmental gains “are only real” if the offsets fund projects such as solar farms or windmills that “would never have been built without the credits”.

A 2016 study for the European Commission into UN-sanctioned offset projects found that more than three-quarters were unlikely to have resulted in additional emissions reductions, meaning that the vast majority of those projects would have been built anyway, without the offset money.

So “in most cases it seems clear that carbon offsetting doesn’t work in practice”, said Friends of the Earth, although “it clearly depends on which projects are being funded”.

7. Pros: climate concerns drive action

Despite concerns over carbon offsetting, trade is on the rise and the market has attracted huge levels of interest and investment. “Many companies are being pressured by customers and shareholders to drive the market for offsets”, said The Wall Street Journal.

“There are just certain things that you simply can’t eliminate altogether,” Columbia Business School Professor Bruce Usher told the newspaper: “And so your only solution at the end of the day, is to use offsets”.

EcoChain.com stressed that offsets “can have a positive effect if they are used appropriately”, but on an individual level, people should make sure offset credits are “credible, permanent, additional and verified by the voluntary market standards”.

8. Cons: lack of consistency

Another key issue in the offsetting debate is whether schemes that provide carbon removals are permanent. To limit climate change, greenhouse gas emissions need to be kept out of the air effectively forever.

“Tree planting is a very popular offset scheme, largely because it’s a lot cheaper than other schemes,” the environmental campaigners network continued. “But sadly, trees can burn down.” Critics have pointed to last year’s wildfires that tore through forest projects on the US west coast that had generated offsets bought by major companies including BP and Microsoft.

By contrast, taking pre-emptive measures to limit emissions would guarantee consistent carbon management. A 2015 report by the Stockholm Environment Institute found that 75% of the credits issued were unlikely to represent real reductions, and that if countries had cut pollution on-site instead of relying on offsets, global CO2 emissions would have been 600 million tonnes lower.