Does Carbon Offsetting Work?

Does carbon offsetting work as an effective solution to mitigate climate change?

Climate change is one of the most impactful issues in the modern world, and atmospheric greenhouse gas emissions are at record levels due to the use of fossil fuels. The concentration of carbon dioxide (CO2) in the atmosphere now sits at over 420 parts per million, a 50% increase compared to pre-industrial times and the highest level in 14 million years.

Solution To Reduce Greenhouse Gas Emissions?

With the growing urgency to address climate change and carbon footprint, carbon offsetting is becoming popular as a solution to mitigate carbon emissions. However, the effectiveness of carbon offsetting or carbon credits remains a topic of debate and controversy.

It is important to note that key developer of the CSS (Carbon Capture and Storage) technologies is oil and gas industry, such as the companies like Shell and Abu Dhabi National Oil Company (ADNOC). The primary purpose of carbon offsetting, it appears, is to enable the continued extraction of oil and gas.

What Is Carbon Offsetting?

Carbon offsetting allows businesses or individuals to compensate for their emissions by funding equivalent CO₂ savings elsewhere. Essentially, when an individual or company emits a certain amount of CO₂, they can purchase carbon offsets to balance out their emissions. Each carbon credit typically represents one metric tonne of CO₂ reduced elsewhere.

Mechanisms of Carbon Offsetting

Projects that reduce or remove carbon from the atmosphere generate carbon offsets, such as reforestation, renewable energy projects and energy efficiency improvements.

These carbon offset programs are implemented and tracked through a series of steps. First, a carbon offset project that can reduce or absorb carbon dioxide is identified and developed. Once the project is underway, it is monitored to measure the amount of CO₂ it has offset. Third-party certification standards verify this reduction to ensure its credibility and that the offsets are issued.

These offsets or carbon credits are then bought and sold in the carbon market, allowing companies and individuals to reduce their net emissions. They are becoming essential to corporate decarbonisation strategies, and the offset market is expected to more than double by 2030.

Are Carbon Offsets Really Effective?

Even though the number of offsets is rapidly expanding, the effectiveness of carbon offsets is up for debate. Some research suggests that carbon offsetting can be an effective decarbonisation solution for unavoidable business emissions when projects are properly implemented and monitored. However, there is mounting evidence that most offset projects exaggerate their environmental benefits and emissions reductions.

A study by The Guardian looked at 50 of the largest carbon offset projects in the world and categorised the offsets from 78% of them as “worthless”. If the projects that have sold the most carbon offsets on the global market are flawed, then the foundation of the carbon offset market remains questionable.

According to the IPCC Sixth Assessment Report, carbon offsetting is less effective at reducing greenhouse gas emissions compared to other measures such as electrification, energy efficiency, material efficiency and enhanced recycling.

Why Carbon Offsets Don’t Work?

Several criticisms and challenges hinder the effectiveness of carbon offsetting. One major issue is additionality. Additionality examines whether the project issuing offsets would have been developed without the financial incentive to sell the associated carbon offsets. If the project would have happened anyway, the carbon offsets are not driving emissions reductions. Instead, the offsets are used solely as a financial tool to make the project more profitable.

Another challenge is permanence, as some projects, particularly reforestation or forest carbon offsets, require long-term maintenance to ensure the CO2 remains sequestered. If there is no effective monitoring to ensure the project has long-term reductions, the offset does not offset emissions. Instead, it allows the offset purchaser to claim lower emissions falsely.

Verification and monitoring are critical yet challenging aspects of carbon offsetting. Ensuring that projects deliver the promised emissions reductions requires rigorous oversight, which can be costly and complex.

Furthermore, there’s no government-regulated standard for verifying carbon offsets, and several private companies have filled the gap. This leads to a conflict of interest for the verification companies, which increases profitability as the carbon offset market expands. For example, Verra, the world’s leading carbon standard, was recently accused of selling worthless carbon offsets to some of the largest companies in the world.

Another reason is the high cost of project implementation. The IEA, in it’s net zero roadmap, stated that “removing carbon from the atmosphere is costly and uncertain.”

Ethical and Practical Concerns

Ethically, carbon offsetting has been criticised for perpetuating inequality. Wealthier nations and companies can afford to purchase credits, while poorer communities often bear the brunt of global warming impacts. This dynamic raises questions about the fairness of offsetting as a solution.

Furthermore, accurately measuring the actual CO₂ reductions achieved by offset projects is difficult, and ensuring their long-term sustainability adds another layer of complexity. Relying heavily on carbon offsetting as a primary climate strategy could divert attention from more direct and systemic solutions to reduce emissions.

Evaluating Carbon Offsetting as a Solution

While carbon offsetting can work in mitigating climate change, its effectiveness is highly dependent on the quality and integrity of the projects. High-quality offset projects, verified by rigorous certification standards, could theoretically deliver real emissions reductions and additional benefits. However, the current market and assurance mechanisms for offsets are not sufficient.

Direct emissions reductions, technological innovations and comprehensive policy changes, should be prioritised for effective action to tackle the climate crisis. As we evaluate carbon offsetting, it is crucial to support comprehensive strategies that address the root causes of climate change and promote sustainable practices.