We can’t stabilise the climate without carbon offsets — so how do we make them work? 

Synopsis: Carbon offsetting affords an opportunity to achieving net-zero emission targets but only if its done with full integrity.


Carbon offsetting has been in news lately. The Grattan Institute released a new report on the role of offsetting in achieving net zero targets. 

Carbon offsetting is a difficult part of the climate change conversation worldwide and, because of past problems, there’s understandable cynicism about its potential.

What is offsetting? 

Offsetting refers to reducing emissions or removing carbon dioxide from the atmosphere in one place to make up for emissions in another.

Though it aims to lower the costs of reducing emissions, in worst case it can increase the costs and give us false confidence about our progress towards net zero emissions.  

Offsetting is often done through a system of credits or offsets — units that represent one tonne of emissions reductions achieved, or one tonne of carbon dioxide removed from the atmosphere. 

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For instance, a mining company with a net-zero target, might be able to partially reduce its emissions through adjusting its operations, but could find it still has emissions that are too expensive or technically impossible to reduce. In this case, it might buy an “offset” to cover these emissions. The offset could come from another company with plenty of options to reduce emissions (such as a landfill owner), or it might come from an activity like tree-planting.

What objections are frequently raised against carbon offsetting?

Some see it as an excuse for polluting companies to delay reducing emissions.

Others say it destroys the fabric of rural communities because it encourages farmers to turn farming land into places for tree-planting and other carbon-storage activities.

Some international schemes have been criticised for crediting offsetting activities that aren’t “additional”. This refers to activity that would have happened anyway, such as rewarding a landholder for maintaining vegetation that was never going to be cleared, or rewarding a manufacturer for investing in low-emissions technology when that would have occurred regardless.

Moreover, if there are too many emissions reduction or removal activities that are credited but didn’t actually happen (“hollow” offsets), then we get a false sense of progress towards net zero. This limits the market’s effectiveness. If buyers aren’t sure they’re getting what they pay for, they won’t pay as much. This pushes prices down, which limits the number of producers willing to do offsetting, because they won’t be paid as much.

What is the way forward? 

Investment in research and development: Governments should invest in research and development and early-stage technology development, such as direct-air carbon capture and storage.   

Stronger policies to reduce emissions: Steps should be taken to cut emissions from transport, industry and agriculture.

Source: This post is based on the article ” We can’t stabilise the climate without carbon offsets — so how do we make them work? ” published in The Down to Earth on 11th October 2021. 

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