Here’s How Carbon Offsets Can Live up to Their Bold Promises

Climate change is poised to change the world for ever, more and more businesses are promising to cut the carbon footprint of their operations. However, reducing greenhouse gas emissions isn’t something that happens in a matter of minutes. This is why large corporations have adopted carbon offsets as a way to fill the gaps.

“It’s an effective tool for transitioning,” says Sarah Leugers Chief Strategy Officer for Gold Standard, a voluntary carbon offset scheme based out of Switzerland. “A company must be on a decarbonization path and utilize carbon offsets in order to accept responsibility for any emissions that are emitted throughout the process.”

Carbon offsets are the process by that an individual or an organization that has a goal to reduce emissions compensates another person to cut emissions. Scientists consider environmental mitigation, as well as greenhouse effects as a whole for the entire earth. This means that the atmospheric damage caused by carbon dioxide released by factories in Chicago could be offset by the reduction of CO2 from projects that introduce electric stoves into villages in rural India. Carbon offset projects typically occur in developing countries located in the Global South because the costs for taking actions like plant the trees (or hiring people stop cutting trees down) or building wind farms are much less than those in industrialized nations.

The most vocal advocates of carbon offsets are of the opinion that they’re not a panacea, and there are those who have a more scathing criticism. “In many instances, carbon offsets] serve as a substitute of someone who reduces their own carbon emissions, and they may be used to justify or lessen the guilt of continuing to emit,” says Barbara Haya head of the Berkeley Carbon Trading Project at the University of California, Berkeley.

The system is under scrutiny because it has not delivered on the emission reductions that were promised. The two of them, Haya along with Danny Cullenward, policy director CarbonPlan, a California-based climate research firm CarbonPlan and CarbonPlan, consider the system “broken,” relying on flawed methods and incentives that have no oversight. Both of them recommend businesses concentrate on reducing the emissions from their own businesses, such as cutting down on business travel, using electric vehicles, and shifting to renewable energy instead of an investment of significant amount in offsets.

The market for carbon offsets has seen an explosion in recent times, with major corporations such as Google and Amazon vowing to be net-zero in emissions, partly through the purchase of offsets, and airlines such as United and American allow consumers to purchase offsets equal to the amount of carbon they emit from their flights. By 2021 the market value of carbon markets that are voluntary (VCM) exceeded $2 billion as per Ecosystem Marketplace, an initiative of Forest Trends, a nonprofit environmental finance company based located in Washington, D.C. That amount is almost four times more than the amount of VCMs last year, which was $520 million.

As the market becomes to the mainstream, you will find a myriad of carbon offset schemes with big environmental claims, but little information to discern which ones are genuine and which aren’t. This is how the process works and what business needs to consider when it decides to utilize carbon offsets.

Certification is an essential component of the System

Carbon offset programs cover a variety of types of projects. However, the most commonly used ones include Renewable energy sources (such as solar, wind and hydroelectric) methane capture, combustion (burning methane makes it an environmentally friendly compound that can then be used to fuel) and efficient energy use (such such as electrification) as well as related to forestry (like forest reforestation) according to Carbon offset company based in Las Vegas. 8 Billion Trees, which manages large planting activities in the Amazon Rainforest.

One carbon offset credit equals one metric tons of carbon dioxide that has been reduced in the atmosphere, be it through avoidance or the capture of CO2. Prices differ based on the type of project timeframe, location cost of labor and materials as well as other variables. The project must calculate the amount of CO2 they have avoided, and submit the information to carbon offset registry which will translate the impact of climate change to individual credit that may then be bought and sold on the market decentralized.

For international recognition of credits to fund projects, they must be accredited with one or more of the carbon offset registries which set the industry standard. The four major registries according to experts include four: the American Carbon Registry (ACR), Climate Action Reserve (CAR) as well as Verra (Verified Carbon Standard)–all three are located on the U.S.– and the Swiss-based Gold Standard.

The certification process involves an audit conducted by a third-party verifier who is commissioned by the developer of the project. The project’s protocols or methods that are that are approved by Verra For instance, they must be scientifically valid, with the ability to measure emissions for a long time that are estimated conservatively, meaning that the method doesn’t overestimate environmental benefits of the project.

“Make sure that the carbon credit] is issued by an internationally recognized standards as there are a number of new organizations which claim the right to offer carbon credits, however they do not possess the essential characteristics,” says Leugers, of the Gold Standard. A lot of projects, for instance don’t have the right baselines for calculating emissions reductionsor would have been able to occur without intervention by the program. Making sure that the projects are internationally certified will help to reduce this problem.

But, Haya is skeptical of the methods used in carbon offset initiatives. “We’re in a low-quality cycle,” she says. “Because the amount of credits created that exaggerate the project’s impact and the costs are too low. At the current price, they’re not sufficient to increase emissions reductions.”

She believes that registries must establish stricter standards for what constitutes an offset credit for carbon within a particular project. Projects that are liberal in its methodological approach could eventually overvalue the carbon offset credits it generates and the benefits to the environment. If registries do break down on their guidelines, creators will usually locate another registry that is that is willing to adhere to their more relaxed procedures.

Monitoring Reporting, Monitoring and verification

Any protocol project should have a plan for reporting progress as well as how emissions are calculated and credits are granted. When the plan is in place it is time to enter in the reporting, monitoring and verification, also known as MRV the phase.

Jodi Manning Director and vice president of partnerships and marketing at Cool Effect, a California-based company Cool Effect, a nonprofit carbon offset service The reporting timeframes for their projects differ. Cookstove projects could be reviewed annually, while projects in forestry might be evaluated once every 3 years. But, Cool Effect says it needs to be updated every six to twelve months, and conducts regular visits to the site, complete with photographs and interviews.

In the case of Gold Standard, most projects must report back approximately once per year, Leugers says. She also points out Gold Standard’s association in the International Social and Environmental Accreditation and Labeling Alliance (ISEAL) and its grievance procedure–to file complaints about Gold Standard or projects–as a way to ensure to ensure transparency and accountability.

Cullenward from CarbonPlan believes that strict compliance with protocols can be insufficient. “We have a way of affirming that we’ve were in compliance with the guidelines,” Cullenward says. “We do not have a way to determine whether the rules make sense.”

A lot part of this uncertainty related to carbon offsets in general The uncertainty is inherent to carbon offsets in general, says Haya. “We are able to quantify emissions. When you measure offsets, you’re measuring emissions reductions, and you need to evaluate against a counterfactual version of what might be the case without the program. It’s impossible to quantify, and the decision-making process is conducted by a group of actors who all profit from higher quality credits.”

Examining the quality of the Carbon Credit

To assess a carbon offset credit’s quality, there are four major terms to know: additionality, permanence/durability, buffer pool, and leakage.

Many experts agree that the long-term benefits to climate change when people choose to trade carbon credits rest on the idea of additionality. That means that credits should only be used to projects that wouldn’t be able to take place without the support of carbon offset schemes. “If the proceeds are used to plant trees that were planted otherwise and no offsets is required for the forests,” Haya says. “You’re not decreasing emissions, you’re making someone pay to do something they’d have done in the first place.”

Cullenward states that some carbon offset companies overstate the value of their projects. A study that looked at the wind power industry in India discovered that at the very least 52 percent of carbon offsets were in connection with projects that could have been constructed without assistance from the UN-run Clean Development Mechanism, an international offset program that was established in the Kyoto Protocol in 1997.

“Time and time again” the author says, “when academics and financially uninterested groups conduct research projects that attempt to evaluate the credibility of these claims as a baseline They find burning garbage fires.”

Permanence refers to the notion that the benefit of the project to the environment is unreversible Durability is the most likely measure of how long this benefits will endure. Certain reduction initiatives are not permanent, for instance the reduction in driving and the switch into an electric cooking stove can stop greenhouse gas emissions from taking place in the first place.

“When we add CO2 to the atmosphere as a result of the burning of fossil fuels can have lasting effects,” Cullenward says. “The impact on the atmosphere as well as the oceans goes on for the geologic time. Therefore, if you wish to make use of offsetting credits in order to claim”It’s okay I emit CO2 into the atmosphere (from flying or drivingand flying of the claim being created must be in line with the time span of the impact on CO2 emission.”

Others projects aren’t certain to last forever. To benefit from the environmental advantages of forest projects, trees would require a minimum of 100 years in order to store one metric ton of carbon. However, fires and droughts and illnesses can occur as well, and when a tree dies carbon dioxide releases. Therefore, developers of projects must consider these risks when designing their protocol.

To protect against natural catastrophes that may thwart any environmental benefit of the particular project or other obstacles, carbon offset companies make a buffer pool to provide insurance. In every project the tens of percent to 25% of the credits are held in a centralized pool that ensures that the project will meet its objectives.

Furthermore “if there’s an incident of burning fire” Cullenward says, “the individuals who purchased and sold credit on the market remain intact, provided that those credits are retired from the buffer pool to compensate for any losses. If a million tonnes of CO2 ignites in the forest, one million credits could be taken out of the buffer pool. As long as the system is stable and stable, the program will be able to meet its endurance claim.”

However, buffer pools aren’t impervious to fire. A recent study of California’s offset program for forestry, Cullenward and fellow researchers discovered that wildfires reduced the carbon credits contained in the buffer pool over the first 10 years of the program. That is, the loss of carbon from wildfires is far more significant than the benefits to climate change of conserving trees with this offset program.

Protocols should be aware of leakage as this is the concept that projects could result in emissions rising outside the areas that generate offset credits. Haya claims this is the case in certain forests conservation projects. “If an owner of land commits to reduce emissions by decreasing the amount of timber they harvest [but not changing] the need for timber products, the conservation of one area of their land is just a way to replace the harvesting of timber elsewhere,” she says.

When looking at an offset scheme for carbon Many companies concentrate on the benefits that come with projects which include sustainable development and jobs for the locals living in the region, empowerment of communities as well as health improvement, and the preservation of biodiversity.

Dee Lawrence, founder of Cool Effect, says she always seeks out projects that have an environmental justice perspective which goes beyond carbon-free benefits. She cites recent projects of the company, which include the restoration of mangrove trees in Myanmar which improves the lives of people in poor communities by creating jobs, as well as the biogas digester project in China that converts methane gas generated from the waste stream into energy that is renewable, and enhances the health of people by providing healthier air. “If an offset of carbon is executed properly, it could be transformative,” Lawrence says.

For Haya she suggests considering carbon offsets as just one tool available in the toolbox. However, in the end, she believes the process of cleaning up one’s own processes will have the most impact.