While carbon offsets may seem to be a convenient way to uphold environmental responsibility, they actually may not be as effective as they are made out to be.
Numerous climate-linked environmental disasters from Australia to the Amazon, youth-led climate strikes, pressure from employees of companies in carbon-intensive industries, and UN reports suggesting that the planet is fast-approaching the point of no return have culminated in a spike in public awareness of the global climate crisis. Seeing as corporations make up an overwhelming majority of carbon emissions worldwide, companies such as Apple and Microsoft have taken up the responsibility to forge a more sustainable future, and one tactic has been at the forefront of the discussion: carbon offsets.
What are Carbon Offsets?
Carbon offsets are an accounting mechanism that high-carbon companies can utilise to mitigate or “offset” their carbon footprint and eventually meet their goals for corporate environmental responsibility, whether it be to go carbon neutral or net-zero. In essence, companies, governments, and individuals looking to reduce their carbon footprint can pay conservation nonprofits such as Native Energy and 3Degrees a sum of money to buy “carbon units” or “credits”. Each carbon credit represents a metric ton of carbon that gets essentially “removed” from the total amount produced by the company. Accordingly, the nonprofit, using the funds provided by companies, can carry out environmental conservation initiatives such as reforestation efforts, maintaining carbon sinks, and conducting environmental research. This exchange should theoretically balance out carbon emissions, preventing an overall increase in CO2 levels.
When governments and large, carbon-intensive businesses buy carbon offsets, it is typically in large amounts. For instance, Microsoft has contracted a total of 1.3 million metric tons of greenhouse gas emissions offsets for 2021 in their effort to become carbon negative by 2030. “We’ve committed to be carbon negative by 2030. This means reducing our greenhouse gas emissions by more than half, removing the rest, and then removing the equivalent of our historical emissions by 2050,” the company said in a statement. Individuals can also pay for carbon offsets on a smaller scale. United Airlines, Virgin Australia, and Qantas outsource their environmental responsibility to passengers by allowing them to purchase carbon offsets for their own flights.
The Additionality Principle
At the crux of the carbon offset controversy is the concept of “additionality”. In essence, if a carbon reduction would have happened even without a carbon credit transaction, the reduction is not additional. A bird sanctuary in Pennsylvania currently sells carbon credits to businesses in return for preserving the 2,300 acres of oak forest under their care. However, as stated by the sanctuary’s director himself, the trees, having been unharmed for a century, face no real danger of logging or deforestation. In other words, this exchange did nothing to decrease net carbon emissions, and was not additional. That being said, additionality is not easy to determine, in that certain conservation or clean energy projects may have gone through regardless of the injection of funds provided by a company looking to offset their carbon emissions.
Carbon offset projects over the past decade have been overwhelmingly ineffective. A 2015 paper conducted by the Stockholm Environment Institute found that over 75% of the credits issued under the Joint Implementation program did not accurately reflect reductions, and did not meet standards of additionality.
The California Air Resources Board, which manages California’s carbon market, exaggerates the number of carbon credits at stake by logging data from trees that bear little resemblance to the regional average, according to a study conducted by climate non-profit CarbonPlan. California’s coastal region holds carbon-rich forests made up of large Douglas firs, prime candidates for preservation and meeting carbon offset goals, however, over 99% of designated forests are inland, where average carbon levels are significantly lower.
The Future of the Carbon Market
A robust carbon offset market could secure a lifeline for industries that would otherwise be inherently unsustainable, such as the fossil fuel industry, all while complying with regulators, investors, and activists. In January 2021, Texas-based oil firm Occidental Petroleum sold a shipload of allegedly carbon-neutral crude oil. In response to criticisms, Occidental’s president of operations Richard Jackson defended the project, claiming it could create a carbon market for the oil industry that directs funds to green-energy projects elsewhere.
Assuming that offsets are as effective as they are intended to be, the existence of a carbon market would provide an incentive for the fossil fuel sector to continue polluting, and thus set a precedent for other carbon-intensive industries. Eventually, the total volume of offsets that these companies rely on to be “carbon neutral” will eventually outweigh the ability of the planet to supply them, inhibiting fundamental change in the long run.
The Market has a Certification Issue
Instead of an official international standard for additionality and carbon offset verification, private groups such as VERRA and the American Carbon Registry are responsible for certifying the sales of offsets, many of which have been proven to have systemic misrepresentations and assumptions that ultimately caused an increase in carbon emissions. While there are task forces monitoring these private firms, their membership is made up of oil executives and multinational corporates who stand to gain from an unregulated system.
In July 2020, Apple unveiled a plan to achieve net-zero carbon emissions by 2030- an initiative spanning across the company’s business practice, manufacturing process, and supply chain. However, their plan’s reliance on carbon offsets is relatively low. Instead, Apple is devoted to renewable energy, low-carbon product design, and product recycling innovations such as a carbon-negative aluminum production method. Apple’s new innovations also help consumers use less energy. Apple’s latest Mac lineup, sporting their proprietary M1 processor, consumes a third of the energy that its Intel-based predecessor does.
By going through the bureaucratic processes stipulated by the environmental NGOs managing carbon offsets, businesses and governments can continue to operate, at an alleged net-zero carbon emissions without overhauling their infrastructure- without making the potentially disruptive and therefore costly switch to sustainable alternatives such as renewable energy. Only time will tell whether the debate over corporate sustainability will result in fundamental change or reliance on carbon offsets.