Carbon Offsetting: In defence of (quality) offsets

Carbon Offsetting: In defence of (quality) offsets

Reports this week about the ‘junk’ nature of carbon offsets used by companies like Chevron are the latest in a litany of revelations that, once again, propel offsetting into the media spotlight – and, once again, not for the right reasons.

They follow last week’s ASA announcement of its intention to clamp down on those companies who put green claims at the heart of their advertising when they are justified only through the purchase of low-quality carbon offsets. Across the pond, the US Federal Trade Commission (FTC) is, similarly, taking aim at greenwashing, updating its policies to pave the way for stronger legal cases to be taken against those companies whose deceptive marketing around sustainability and environmental responsibility violates federal law.

Offsetting earns its bad reputation on two levels – first, the quality of some of the offsets supplied and, second, the behaviour of those that use them to underpin green claims in lieu of managing down their emissions – the greenwashers.

Some of the criticism offsetting attracts is justified. Yet the global scientific community agrees that offsetting has an important role to play in addressing the climate crisis and in the move towards net zero. And the persistent criticism of offsets and the companies that use them risks turning companies away from making vital net zero commitments as they question whether it will just expose them – like so many others – to accusations of greenwashing.

All offsets are not equal.
Offsets are not created equally.

Poor quality offsets often take no account of the broader impact of the offsetting activity on the surrounding environment. For example, planting a single species at scale in areas such as the Amazon can have disastrous impacts on the local ecosystem and its biodiversity. The net environmental impact of some offsetting schemes like this can actually be negative.

These are the type of offsetting schemes that make the headlines. But there are many schemes that are of high quality and that deliver strong, positive net impacts.

What does a good offset look like?

Oxford University has sought to provide guidance on what constitutes a ‘good’ offset. ‘The Oxford Principles of Carbon Offsetting’ (2020) set out a recommended approach to offsetting, following four principles:

● Principle 1: Cut emissions, use high quality offsets (more on this below), and regularly revise offsetting strategy as best practice evolves
● Principle 2: Shift to carbon removal offsetting
● Principle 3: Shift to long-lived storage
● Principle 4: Support the development of net zero aligned offsetting

The Principles separate offsets into five categories, which are ranked from low to high quality. Quality is determined by how long the carbon is expected to be stored (linked to Principle 3) and whether carbon is explicitly removed rather than avoided or reduced (linked to Principle 2).

Perhaps unsurprisingly, higher quality offsets, such as the use of Direct Air Capture technology (up to £500 per ton CO2 captured), are much more expensive than lower quality offsets, such as afforestation (typically around £10 per ton CO2 captured, though this varies substantially). And whilst the costs of higher quality carbon removals are expected to fall as investment in the different technology types increases, it’s easy to see why those making spurious claims about carbon neutrality whilst doing
little to reduce their emissions will opt for the cheaper, low quality offset option.

Companies, such as Climate Partner, who Net Zero Now works with, provide a range of high-quality offsetting options for companies to select from and create a portfolio. All offsets offered conform with rigorous standards, with projects validated and continuously monitored throughout the project lifetime.

Harry Llewellyn, Climate Research Manager at Net Zero Now, commented:

“It’s easy to see why offsetting attracts so much attention, and most of it negative. Offsets are relatively easily bought by those who wish to signal to the world that they’re taking action on their climate impact, whilst doing little behind the scenes to actually manage emissions reductions.

“Net Zero is the more ambitious goal.  Carbon neutrality can be bought, with no thought given to modifying the company’s current activities. Net Zero, in line with the Science-Based Targets Initiative, requires over 90% of a company’s total footprint to be cut before offsetting residual unavoidable emissions with high quality carbon removals.

“Carbon offsetting is a relatively new and emerging field, and we need businesses to know that there are good quality offsets out there that they can use with confidence to complement their robust carbon reduction strategy as they move to net zero. There’s a risk that if companies focus too much on media coverage to inform their approach, they will simply steer clear of offsets altogether and fail to invest in the good quality schemes that we undoubtedly need as we tackle the climate emergency.”