Is carbon offsetting a scam?

25 Aug 2022
James Butcher Avatar
James Butcher
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I recently listened to a great debate around carbon offsetting as part of the BBC Big Green Money show.

A point was made several times that offsetting is valid option, provided that a company has already done all it can do to reduce emissions. It is not a license to carry on business as usual, doing the same ‘bad’ things. Otherwise, it is a scam as Greenpeace call it - a “bookkeeping trick intended to obscure climate wrecking-emissions”.

What the panel explained was that, sadly, like so many other parts of life, there are scams and less reputable companies. This is made possible by the lack of management of the offset market, unlike other financial markets. This means that a company could technically sell the same offset multiple times to different companies if they wanted to.

Three tips for carbon offsetting

Before considering offsetting at all, make sure you have first tried to reduce your own carbon emissions. This does not mean simply excusing continued unsustainable activities with the aim of offsetting them. Offsetting is not an alternative to meaningful reductions.

Secondly, ensure that you are offsetting through a reputable and transparent programme that actually adds value; your carbon offset should make a difference. For example, you can buy offsets from wind farms in China that have been there over a decade, rendering them worthless in terms of ecological value Any investment in offsetting needs to fund new programmes which drive measurable change. This is where additionality comes into play. This is a term which describes the quality of carbon offsets; an offset should create an extra reduction of carbon that would not have otherwise happened. And as with so many things in the sustainability landscape, transparency around carbon offsetting programmes is essential.

Finally, ensure the programme is well-managed to sustain impact. For example, planting new mangrove swamps can have a positive impact but only if managed and maintained to ensure the mangroves flourish and grow. Similarly, be aware of leakage - yes, I learnt another term. Leakage is when carbon offsetting just moves the problem somewhere else. Let us take reforestation as an example, , an offsetting method which - done properly with native species - is good for carbon, clean air, and biodiversity. However, this is all good and well provided that the result is not simply deforestation elsewhere (a.k.a leakage).

Maintain a healthy level of scepticism

Personally, I am sceptical of offsetting. A speaker at the Cambridge Institute of Sustainability Leadership (CISL) described it as a tug of war; carbon use and carbon offset are in stress against each other - the rope - and at some point the rope will break if we do not strive to reduce emissions. A simple metaphor which I hope will stick with you as it did me.

So, first and foremost as individuals and companies we must first look to avoid and reduce emissions. But when there are no alternatives. For example, it is not within our power to reduce emissions on an unavoidable flight. Only then does carbon offsetting have a place to fund new and existing projects.

I hope that the three takeaways above are helpful, and if you are looking to reduce your company’s emissions, our guide to Scope 3 emissions should provide a great resource base and roadmap to get you started.

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