Double negative photograph of a plane flying over a forest.

3 things you should know about offsetting

What is a carbon credit? What does scientific research say about the role of carbon offsets? And how do I know if I’m doing the right thing? As the business of carbon offsets booms, we explore the truth behind the pledges, separating fact from fiction. 

Jurij Krajcic and Samantha Ibbott report 

Most of us have heard of carbon offsets. We’ve bought a product, flight, or holiday and been offered the possibility to offset our emissions or, increasingly, been informed that offsetting costs are included in the price of a product. Over the years, carbon offsetting has exploded into a $2 billion industry which is predicted to grow to a $250 billion industry by 2050. But alongside this growth, controversial claims have multiplied. So, let’s clear up a few things.

Firstly, what exactly is carbon offsetting? 

In principle, offsets are a great way to balance out unavoidable emissions. You just have to fly to that all-important meeting. So, you pay more and offset your flight. What could be bad about that? Well, despite the goodwill of your actions, many offsetting schemes are misleading, unfair and make no difference when it comes to tackling climate change – in fact, some cause more harm than good! Also, did you have to fly in the first place? 

The United Nations defines offsetting as: “A climate action that enables individuals and organisations to compensate for the emissions they cannot avoid, by supporting worthy projects that reduce emissions somewhere else”.  

In reality, any attempt to ‘compensate’ for emissions with removals, ‘conceal’ emissions behind removals, or ‘merge’ emissions and carbon sequestration (the removal of carbon from the atmosphere) constitutes offsetting. 

Let’s break that down a bit more with an example. Say an organisation emits 100 tonnes of carbon dioxide and/or equivalent greenhouse gases (known as CO2e) over the course of a year. It then buys 20 tonnes worth of removals. By merging those two fundamentally different concepts together they then claim that they’ve reduced their net emissions to 80 tonnes.  

Why is this an issue? Let’s peek behind the ‘carbon-neutral’ facade. 

One: Reduce vs remove

Removals are not the same as reductions and such claims, like the example above, are incredibly misleading. The action of buying removals has done nothing to reduce actual emissions in the first place, however, nothing prevents them from claiming to have lower emissions.  

Greenwashing exists in many forms and is becoming increasingly sophisticated and harder to detect. Sadly, the truth is that purchasing cheap offsets of dubious quality is almost invariably easier and cheaper than taking action to reduce emissions. However, the Intergovernmental Panel on Climate Change (the IPCC) is clear: although carbon removals can play a “limited role” in tackling climate change, they cannot and should not replace deep and immediate emission reductions. Tree planting is insignificant when looking at the big picture.  

The fact is that there aren’t enough trees to offset society’s carbon emissions – and there never will be.

Dr Bonnie Waring, Senior Lecturer, Grantham Institute – Climate Change and Environment, Imperial College London writing in The Conversation.

Offsetting should be a last resort, not a route to continue with business-as-usual and ultimately avoid taking the necessary steps to reduce the impact on the climate and environment in the first place. 

And this is only part of the problem – quality is another major issue…

Two: Reversibility

In recent years, many offsetting schemes have been exposed as either fraudulent or deeply flawed, rendering those 20 tonnes of removals in our example completely worthless.  

Offsets ought to last at least as long as the emissions they are compensating for. For carbon dioxide emissions, this means several decades to several centuries. The issue is that land-based carbon removals are vulnerable to ‘reversal’, meaning that changes in practices, weather events, wildfires, pests, or other unforeseen circumstances can release the carbon back into the atmosphere.  

The mechanisms designed by carbon markets to deal with these risks are becoming increasingly inadequate, as extreme weather events are made more frequent and severe by climate change. Ironic, right? Because of this, the question of liability looms large. Should future generations of land managers be held liable if carbon removal schemes sold by their ancestors become worthless due to a reversal, such as a wildfire burning down an offsetting woodland? Currently, this question goes unanswered, as does the question of determining the quality of a carbon credit.  

Three: Carbon credits

In the context of carbon removals, a carbon credit is a certificate stating that a tonne of CO2e has been sequestered (removed from the atmosphere) somewhere. In most cases, carbon credits are specifically created to be traded for money on carbon-offsetting markets. That means that any entity that sequesters carbon can generate a carbon credit. That entity can then sell that credit to another entity that wishes to use it to offset its emissions. 

It is extremely difficult to assess the quality of carbon credits, and reversals are a concern. However, there is a growing consensus among scientists that (for certain practices, such as carbon farming) ensuring the highest levels of ecosystem integrity is a key requirement to minimise the risk of reversals. 

Healthy ecosystems greatly increase our resilience to droughts, floods, erosion, and desertification. Therefore, to improve quality, ecosystem restoration should go hand- in- hand with carbon removals. This does not mean planting swathes of trees of the same species wherever you find space. Not all ecosystems on land can or should support forests. In fact, the world’s peatlands contain twice as much carbon as all the world’s forests.

Supporting and restoring ecosystems – whilst securing and protecting the livelihoods and well-being of local communities – should be the primary priority, with carbon sequestration a co-benefit. 

Unfortunately, carbon offsetting markets were never designed to address the issue of high-quality removals in such a way. Their fixation on carbon credits means that, in most cases, such elements are not considered, resulting in low-quality vulnerable removals that can impact negatively on local communities. What’s more, once the certificate is sold – and sometimes the same credit is sold multiple times to different parties – it is very difficult to detect reversals. And even if a reversal is detected, the question of liability remains unanswered. 

More of a hindrance than a help

Strong regulation is required if we are to attempt to ensure that only high-quality offsets – that do not harm local communities or the environment – can be sold. However, such regulations do not exist. Ultimately, however, carbon offsetting markets act as a distraction from the real change that is needed – deep emission reductions. They encourage greenwashing, lack transparency, and remain poorly regulated, so you can never be sure if your money is well spent.  

So, if you really want to reduce your impact on the environment – whether as an individual or a business – opt for reductions, not offsetting. It’s as simple as that.