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Tangled in the ‘Net’ of Net Zero: does Carbon Offsetting actually work?

Carbon offsetting promises an easy green win for organisations. But these schemes are ripe for exploitation, and bogus carbon credits are ripping off organisations daily.

Written by:
Sarah Mercer & Matthew Warren

If your organisation has or is planning to develop sustainability goals or even a Net Zero plan, it’s vital to make sure that you’re not actually making things worse. In order to respond to the climate and nature emergency, the plan should be to decarbonise as soon as possible. And, fundamentally, no plan is a good one unless it also commits to supporting the protection and restoration of the living world upon which we all depend. These things can take time though, and in the meantime, it can seem like an easy win to pay for carbon credits that offer to offset greenhouse gas emissions.

This is known as carbon offsetting, which has become a common feature of company sustainability plans, but it’s not quite as straightforward as it might seem. In principle, it involves making up for emissions by absorbing and storing, or preventing the emission of an equivalent amount elsewhere.

However, a significant amount of research is now casting doubt on the effectiveness of such schemes. Last year, for instance, a report by the NewClimate Institute found that there were no carbon offsets available that were durable and scalable enough to have “environmental integrity”.

Carbon credits are surprisingly cheap, it turns out. A few months ago, if you had a tonne of carbon dioxide emissions weighing on your conscience then you could absolve it for just £3. In the face of this, why would any business who can afford to pay this premium choose instead to focus their efforts on transforming their organisation?

This is borne out by recent developments in the markets for carbon credits. As companies increasingly face pressure to reduce their contribution to the climate and nature crisis, voluntary carbon offset markets have grown massively, increasing in value five-fold since 2018. One projection predicts a 100-fold increase by 2050. But is this actually making a difference?

A recent investigation by The Guardian, Die Zeit, and Source Material looked into credits based on a promise of avoiding potential deforestation. This is not the only kind of commercially available carbon offset, but they do account for almost a third of the carbon offsets sold around the world.

The analysis showed that only 6% of the carbon credits sold represented real reductions in greenhouse gases.

They also found that the credits’ value in tackling the climate crisis was on average overestimated by 406%.

These credits were all certified by the largest carbon credit certification organisation, Verra.

It’s important to know that carbon credits come in different forms, including projects that have genuine climate benefits and co-benefits for local communities where they are being implemented. However, particularly in this area of forest protection, the environmental value of credits are particularly liable to being manipulated.

This is because they trade on the threat of deforestation rather than guaranteeing new carbon storage. In other words, this type of carbon offset promises to stop new emissions from deforestation and so the value is dependent on the estimated risk to the forest. 

Examples of this being manipulated include equating isolated forests to forests close to roads (which are more likely to be logged), as well as redrawing boundaries of reserves to ensure they include sections that have been cut down, making them look at higher immediate risk than might be realistic. 

Imagine paying money to a group that said they were combating malaria, but then finding out they were using that money to send mosquito nets to Svalbard; or that they claimed to be alleviating famine but in fact were just distributing easter eggs in Harrods. These don’t work to make a difference because the threat doesn’t apply to the targeted area.

The thing is, the only ones working out if the money from carbon credits is actually being targeted properly are certification companies like Verra. These companies rely on being trusted to maintain the integrity of their certificates, but research into their practices has certainly put a severe dent in that trust.

The chief executive of Verra said that the value of avoided deforestation models depends on comparison to an imagined future; taking, in his words, “a leap of faith.” The question about the credibility of carbon offsets, then, comes down to this: do you have faith in the judgements of companies whose environmental motives can easily be bent or disregarded in favour of profit? How far would you trust a used car(bon) salesperson?

The head of the Carbon Trading Project at the University of California, Barbara Haya, reflected on the implications of the analysis, saying

“Companies are making false claims and then they’re convincing customers that they can fly guilt-free or buy carbon-neutral products when they aren’t in any way carbon-neutral.”

On this, Source Material’s article doesn’t mince its words, calling these schemes “The Carbon Con”.

This investigation follows others that have drawn similar conclusions. Both an investigation of California’s forest carbon offsets program and a study of similar forest protection programmes in Madagascar and the Democratic Republic of Congo found that companies had inflated the environmental value of carbon credits.

These kinds of mis-selling might be easily misconstrued as a victimless crime, with no-one really getting hurt over some accounting errors. However, it’s important to bear in mind that for every tonne of CO2e not saved in these projects, there’s still a tonne that the company purchasing the credit feels able to emit, in good faith telling their customers that the flight they’re taking, the meal they’re eating, or the heating they’re using isn’t contributing to the climate and nature emergency.

Global law normally takes a pretty dim view of selling things that aren’t delivered. But for carbon offset companies, whose services are so hard to measure, take place far from the customers who bought them, and function in a relative regulatory vacuum, consequences don’t seem to be on the horizon. But, growing movements to criminalise, for example, Ecocide (large scale, wanton damage to nature) as high up as the International Criminal Court, could mean that the people and organisations selling these credits might not be immune to consequences forever.

So what then should organisations do?

  1. Make a plan that embraces adaptation to a decarbonised, nature-first future sooner rather than later. Always remember that the gold standard is “zero carbon,” not “net zero”;
  2. Support the criminalisation of Ecocide and other forms of legal regulation instead of supporting carbon offsets;
  3. Enable everyone in your organisation to deliver true sustainability by getting in touch with us to book targeted training.

Carbon offsets cannot be relied on as a replacement for direct emissions reductions. Trying to make a real difference with carbon offsets can easily get you tangled in opaque carbon accountancy, so don’t get caught up on the idea of net zero; rather, always focus on getting to zero emissions and avoiding ecocide.

It is true that increasing carbon sequestration will be an essential element of the transition to a sustainable society, especially given the sheer quantity of fossil fuels we’ve now burnt. However, be very careful where you put your trust. If in doubt, avoid projects with companies trading on hypothetical future threats; if you want to do good, trust and support well-known charitable organisations with a record of protecting and restoring nature.

And as individuals, for those of us lucky to have immediate access to nature - be it a park, community garden in the city or an apartment terrace vegetable box - we can do our bit to directly help to protect and restore it too.

Otherwise, just as is always the case with creating positive progress in the world, it happens fastest when we’re all informed and talking about it, so share this knowledge!

Conversation Starters

Want to talk about what’s in this blog, but don’t know where to start? Try these conversation starters.

For more conservatively-minded folks:

We all want to know how the money we spend is being used. This is just sound financial management. Why would you give your hard-earned cash to some nameless, faraway project which claims to be helping you but is actually using your money to gamble on some imagined future? This is what much of the market for carbon credits currently does. You’re much better off investing in things you can be absolutely sure are contributing to your goals. A truly sound investment would be putting your money into protecting nature, ensuring your grandchildren can enjoy the beautiful countryside, fresh air and clean water. 

For more liberally-minded folks:

Are you happy where you work? Do you wish you could work somewhere that was doing good? There is no point wasting time in jobs that are directly contributing to the climate and nature crisis. It is unethical and these jobs will soon be in the past. Your skills and purpose will be better appreciated in the climate sector. And if you can’t move jobs yet, would you consider helping to change your organisation from the inside? There are so many ways we can be climate activists and leaders and still earn more than a decent living wage. And when we have learned how, we can share this vital information with others. We can be part of the tipping point towards a just new system that is equitable for all life on Earth.Carbon offsets can seem like a really good thing, right? You give money to projects planting trees in the Amazon, helping local communities on the frontlines of climate change and much more. All while offsetting your own emissions. That’s at least what carbon offset organisations claim to do.

But the truth is, the vast majority of credits that you and your organisation can buy can’t claim with absolute certainty that this is what happens. More often than not, the impact of these projects is negligible and can actually make things worse. If you’re wanting to do your bit in combatting the climate and nature emergency, it’s always better to focus on “zero carbon” rather than supposedly offsetting emissions to get to “net zero”. And investing - your money, time and support - in protecting and restoring nature, is by far the most impactful place you and your organisation can start.

For a climate denier or sceptic:

Fossil fuelled industries built the prosperous society we benefit from today. But we also need to follow the money. These sectors are dying out and green jobs pay better. Why waste time investing into a company that won’t be able to legally or physically exist in a few years. And why not get paid more, to create a cleaner planet that we all benefit from? If we don’t, it just means other countries will get there sooner. What do you care about? What or who do you want to protect? A climate job will help you make that happen, and get paid better for it.Businesses are being forced into transforming the way they work to meet ever-more burdensome sustainability requirements. It’s pushing many of them to invest in so-called “carbon offsets”. These might seem like an easy way to tick the boxes and just get on with business as usual, but they’re mostly a waste of time and money. You’re always better off investing that cash in things that will allow your organisation to profit from the global shift to a low-carbon economy in the long term, and not be left behind. 

For someone with climate anxiety:

Carbon offsets can seem like a great way to support projects that are making a difference, as well as helping you cope with the guilt and anxiety that can come from things like driving a car, flying or buying things wrapped in plastic. Sadly, most of these carbon offset schemes are bogus and can’t guarantee the impact they’re promising. A truly inspiring and hopeful way to spend your time and money though is by supporting people and organisations who are actually protecting and restoring nature. And you can be a part of this too. Perhaps by starting to grow some of your own food, rewilding a little patch of grass, or simply spending time in nature and encouraging others to as well.

Every small positive action you take is powerful far beyond its individual impact, because of what it communicates to others. Things are picking up pace, and it’s because of millions of people like you and me making small changes…