Helpful or Harmful? The Truth behind Carbon Offsetting

Visual of the Carbon Offset Cycle

“We’re going to be net-zero by 2030!”
“We’re planning to reach carbon neutrality by 2045!”

We’ve seen major corporations and countries claim these targets but what do they actually mean? How are they planning on reaching these benchmarks? The answer: Carbon Offsetting.

Carbon offsetting is the financial compensation of carbon emissions that businesses, countries or individual’s want to neutralize from their carbon footprint through investments in green projects of their choice where the money invested will reduce the equivalent amount of carbon emissions. Carbon offsetting can be used in a variety of situations including but not limited to:

1. When a company exceeds their carbon emissions target and needs to invest a certain amount of money to compensate for the excess carbon emissions,
2. When individuals want to neutralize their day-to-day carbon footprint,
3. When corporations in industries lack the capabilities to further decrease their carbon footprint due to a lack of low-carbon technologies available, for example. This is also known as offsetting residual emissions which are referred to as emissions that are not feasible to eliminate and require carbon offsetting to remove.

The most well-known example of carbon offsets is carbon credits. Usually, 1 carbon credit is equivalent to 1 tonne of carbon dioxide emitted and is a one-time purchase. Hence, companies need to repeatedly buy carbon credits to maintain offsetting which is why carbon offsetting isn’t a viable long-term option (more on this later). Businesses/individuals will buy however many carbon credits they need and the money is invested in projects that reduce, remove or avoid greenhouse gas (GHG) emissions.

Projects are the central component of carbon offsetting. Thus, for a project to be considered a carbon credit project, it must adhere to a rigorous set of guidelines and undergo a verification process by expert panels at leading offset standard organizations which include Verra’s Verified Carbon Standard (VCS) or Gold Standard. As previously mentioned, there are 3 types of carbon credit projects: to reduce, remove or avoid greenhouse gas emissions. Examples of these projects include:

1. Avoiding GHG Emissions: Renewable Energy Development in Vulnerable Communities
2. Reducing GHG Emissions: Reforestation Projects, Investing in Carbon Capture Technologies
3. Removing GHG Emissions: Investing in Methane Gas Capture from Wastewater

Another type of carbon offsetting is Like-for-Like Offsetting — a more complicated approach to carbon offsetting. The difficulty in implementing this form of offsetting is the compensation of emissions has to be the equilibrant of the source of emissions, correspond in terms of warming impact, timescale and durability of carbon storage.

Despite all its benefits, carbon offsetting has the potential to do more harm than good IF corporations and countries become dependent on it as their main form of reducing their carbon footprint. Article 4.1 of the Paris Agreement states that emissions of GHG are negligible so long as actions are taken to neutralize the emitted GHG which can be done by investing in sinks to absorb carbon, also known as carbon offsetting. However, this doesn’t entail that members should solely rely on carbon offsetting to compensate for emissions because there is a limit to how much we can compensate for. Individuals, businesses and countries’ priority should be to significantly decrease the emission of GHG while investing in technologies to remove GHG from the atmosphere. Until a low-carbon atmosphere is achieved, carbon offsetting should be used to aid for the emissions that haven’t yet been prevented. If an industry cannot reduce its carbon footprint further, carbon offsets should continue to be used as a compensation tool for the residual emissions.

The ease and accessibility of carbon offsetting is a double-edged sword: convenient for widespread use while providing users with an excuse not to make a conscious effort to reduce their carbon footprint. The fear accompanied by the increasing use of carbon offsetting is the danger of society neglecting the climate emergency because they assume offsetting is sufficient climate action. All in all, the verdict on carbon offsetting boils down to how to is being used in a person, organization or country’s climate action portfolio.

Bonus: Low-Carbon and Negative Emissions Technologies

High risk, high reward… Potential is high for the success of low-carbon and negative emissions technologies but the lack of large-scale analysis for these technologies placed many on the fence for implementation approaches incorporating these technologies. With global gross emissions growing, the gross removal of 20% of total emissions isn’t going to cut it. We need more to stop the emergency we are in. But with countries only pledging NET-zero (bear in mind NOT absolute zero) by 2050, do we really have the time to count out low-carbon and negative emissions technologies?

Initial research has found that 13gtons/year (almost 30% of global emissions) could be removed with carbon dioxide removal (CDR) approaches through the use of a portfolio of technologies. The integrated assessment model favours bioenergy carbon capture and sequestration (BECCs). However, to remove 10gtons/year through BECCs require extensive land space which only China and Russia possess sufficient land space.

My take: Any technologies proved to have carbon removal/low-carbon capabilities is worth incorporating into climate action portfolios. Since we are unaware of the potential negative impacts these technologies could trigger at a mass scale, increasing diversity within portfolios reduces possible effects. This is how much time we have left. We don’t have excuses to neglect any possible tools to compensate for the damage that has already occurred and we certainly don’t have the ability to incur more.