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Do Carbon Offsets Work? Here’s Why Carbon Offsets Are Effective

why carbon offsets don't work

Carbon offsets are no stranger to heavy criticism, and we love the growth that is watered from constructive insight. These well-intentioned critics deserve an elucidation rooted in education that will foster a better understanding of the carbon offset community. But, to accomplish better clarity we’ll need to get to the root of the misunderstanding behind “why carbon offsets don’t work” to make how they work and are utilized better known. 

To kick it off let’s make one thing very clear, carbon offsets should be included in any company’s sustainability strategy, but they shouldn’t be the entire strategy. 

First, the science behind carbon offsetting is incredibly important, here are two well-known facts across the industry:

  • We must dramatically reduce emissions and remove carbon that is already in the atmosphere. 
  • The majority of emissions cuts must come from ending the use of fossil fuels, but we will not reach our emissions reduction goals without addressing deforestation, another major source of emissions.

Most in the industry would agree that offsets should be supplementary to additional sustainability initiatives and attempts to curb emissions. They should not be treated as the only solution and should be used judiciously as a part of a greater sustainability plan to reduce GHG emissions.  

What Is Carbon Offsetting?

A carbon offset is a reduction or removal of carbon dioxide or other greenhouse gases (GHG) made in order to compensate for emissions made elsewhere. Offsets are measured in metric tons of carbon dioxide equivalent (mtCOe), but you’ll often hear of organizations measuring in pounds.

Reducing emissions through carbon offsetting is incredibly important to reaching global net zero goals, it’s done through carbon offset projects that generate carbon credits which can be sold and used to mitigate GHG emissions. 

Carbon credits are generated by projects that support activities like protecting forests, capturing methane, building wind farms, or providing water purification systems. Each of these projects works to either remove carbon dioxide or prevent future carbon emissions. Many also foster the growth of community wellness.

why carbon offsets don't work

3 Types Of Carbon Offset Projects

Now that you know a little more about what carbon offsetting projects are and how they work to reduce GHG emissions, we’ll chat through the types of carbon offset projects.

Forest protection, improved forest management, water purification, methane capture, composting, creating clean energy sources, ocean conservation and cleanup… the list goes on. 

All of these projects can be divided into one of three main categories: nature-based, improved health and livelihoods, and sustainable infrastructure. 

1. Nature-Based Projects

Nature-based carbon offset solutions have the potential to provide 20% of the climate mitigation needed between now and 2050 in line with a 2°C warming scenario.

These initiatives reduce carbon emissions while preserving biodiversity, and providing jobs to local communities. Offset projects in this category are largely forestry-based and work to protect forests, repair degradation, and implement sustainable forest management.

Some examples of nature-based projects include:

  • Amazon Rainforest Protection is a forest conservation project that is responsible for reducing over 360,000 tons of carbon every year. 
  • McCloud River Conservation is a forest management project that generates 50,000 metric tons of carbon emissions reductions each year through sustainable practices of commercial timberlands. 
  • The Yarra Yarra Biodiversity Corridor in southwest Australia is an excellent example of a nature-based reforestation project as it involves planting indigenous species to encourage the reintroduction of endangered species and combat desertification. 

2. Sustainable Infrastructure

Projects that focus on building and scaling renewable energy like wind, solar, hydropower, and geothermal, as well as projects that use methane capture for energy and nitrous oxide abatement technologies, along with compost, biomass, and biogas are considered sustainable infrastructure projects. 

The major benefit of these projects is the reduction in reliance on fossil fuels which in turn improves air quality and lessens illness in local communities as well as stimulation of the local job market.

3. Improved Health & Livelihood

A changing climate can adversely impact food production, air quality, clean water access, and secure shelter. Under-represented communities in the global south are especially at risk. 

Improved livelihood projects help provide families and communities in need with items like fuel-efficient cookstoves, household solar and biodigesters, and water purification technology. These methods help improve air and water quality, reduce illness, and reduce household costs. 

How Are Carbon Offsets Monitored?

Carbon offsets are monitored through carbon standards or groups that verify carbon offset projects through quality assurance criteria. Using a rigorous screening and observation process, carbon standards ensure that all verified carbon offsetting projects positively impact the environment and leave a lasting impact. 

High-quality offsets are issued from any of the major carbon standards (Verra, Gold Standard, American Carbon Registry, Climate Action Reserve)  and will have undergone a robust verification process by an ISO-accredited third-party verifier. These credits are tracked on registries to ensure credits are not double-counted. 

In order to be verified by one of these standards, the project must demonstrate certain criteria, for example, additionality and permanence. 

  • An offset project is additional if the GHG reductions would not have materialized had the project not existed. In the event the reduction would have happened in the absence of the project, then it is not additional.
  • In addressing permanence, often a challenge associated with carbon offsets is that CO2 emissions are relatively long-lived. This means that much of the carbon emitted this year will, at some point, be removed naturally. But, 25% does remain in the atmosphere, and in order to compensate carbon offsets have to have GHG reductions that are indefinite into the future.

Are Carbon Offsets Effective?

We must do two things to avoid a climate breakdown: 

  1. Dramatically reduce emissions 
  2. Rapidly remove carbon that is already in the atmosphere. 

Climate change is driven by high greenhouse gas emissions, such as carbon dioxide and methane, that wrap the Earth trapping the sun’s heat and thus raising global temperatures. 

As discussed earlier, carbon offsets fund projects that either lower carbon emissions, prevent future ones, or take carbon out of the atmosphere and store it in carbon reservoirs. Investing in offset projects that help to remove or reduce the amount of carbon in the atmosphere is one of the key ingredients needed to combat climate change.

Let’s review exactly how effective carbon offsetting is.

Carbon offsets reduce and prevent future carbon and other GHG emissions

Not only do carbon offsets help to reduce or remove existing carbon and GHG emissions, but offset projects can also help prevent the addition of future carbon and GHGs from entering the earth’s atmosphere. 

Offset projects that focus on protecting sizable natural carbon sinks, such as coastal wetland ecosystems, are one way to ensure that future emissions can be safely stored. 

For example, a mangrove restoration project in India is expected to restore over 16 million mangrove trees which are estimated to sequester 700,000 tons of carbon dioxide over the next 20 years! 

In addition to sequestering carbon, the restoration project will improve habitat conditions for the local fish and crab population which will result in the improved health of the marine ecosystem, thus ensuring the longevity of the carbon sink.

Carbon offsets help marginalized communities 

Unfortunately, marginalized communities are often the first to bear the brunt of both climate change and air pollution. 

Carbon offsets were originally created as a means to not only provide GHG reduction benefits but also benefit the communities in the vicinity of carbon offset projects. 

The benefits of a community in the vicinity of a project include:

  • Improved social, economic, and/or ecological outcomes related to the implementation of a carbon offset project. 
  • Increased community employment opportunities, air or water quality improvement, biodiversity and biological habitat conservation, energy access, and access to community health and education services. 
  • Businesses can make an impact with their finances by purchasing carbon credits that focus on improving the quality of life or environmental conditions for marginalized communities.  
  • Due to the environmental benefits that arise from carbon offset projects, carbon offsetting is capable of lessening environmental injustices while driving meaningful climate change mitigation. 

Think of it this way…

Approximately 80% of the world’s most impoverished communities depend on resources from local forests for survival. With each acre lost, these communities are further marginalized and exposed to environmental injustice. 

Forest offset projects like reforestation, conservation, or forest management are able to protect the land for those that rely on it, while also preventing species loss and removing carbon.  

For example, a forest conservation project in the Congo Basin Rainforest is simultaneously protecting over 300,000 hectares of land while providing over 130 locals with full-time job positions. The project supports training on sustainable agriculture and fishing practices in addition to offsetting close to 3.5 million tons of carbon throughout the project’s lifetime! Projects like these often work directly with local communities to ensure their involvement in the project to prevent the stated issues. Hear directly from the communities fighting against deforestation with the offsetting project Mai Ndombe in the DRC.

importance of carbon offsets
**Photo from Mai Ndombe, a Forest Conservation Project in DRC, Africa 

Nature-based solutions are necessary to halt climate change 

We love proving a point through good study and data.

In 2017, a study published by Bronson Griscom and associates stated that nature-based solutions could help achieve 20% of the mitigation needed between now and 2050 to keep global warming below 2°C. 

Nature-based solutions refer to actions and policies that protect, manage, and restore ecosystems to address socio-environmental challenges. These nature-based solutions include a range of ecosystem-related approaches including the following categories: 

  • Ecosystem restoration 
  • Issue-specific ecosystem-related 
  • Ecosystem-based management
  • Ecosystem protection

The remaining 80% of mitigation will have to come from emission reduction strategies and carbon removal projects.

Examples Of Carbon Offset Projects

It’s important to recognize and discuss the projects that have been successful in achieving their goals, especially those that have made a difference in the quality of life in the communities they serve.

  • This offsetting project in Mai Ndombe in the DRC protects over 740,000 acres of forest in direct partnership with the local community. The economic and social development program impacts over 50,000 community members and was co-created by local leaders.
  • The most extensive peer-reviewed analysis to date looked at 40 voluntary carbon projects in developing countries and concluded that deforestation was 47%lower than in areas with the same topography and facing similar threats, while degradation rates were 58% lower.
  • One offset project in an area of the Peruvian Amazon that had the country’s highest rates of deforestation has reduced deforestation by 75%, resulting in the avoidance of more than 6 million tons of carbon emissions. The local communities in the project area benefited from this program through better healthcare and agricultural training. 
  • Carbon offset programs in California have seen more than 100 million credits traded to date, generating more than $500 million in revenue–with most of that going directly to local communities.
  • The government of Costa Rica, meanwhile, generates $30 million a year for forest conservation through the sale of carbon credits and has conserved more than 2.5 million acres of its forests to date.

Carbon offsetting creates positive incentives that make forests more valuable alive than dead. Increasing the demand for offsets can generate much-needed action to test effective and socially responsible solutions, and scale them up globally through policy reforms, ensuring that future projects are even more beneficial.

Common Criticism About Carbon Offsets

Carbon offsetting can’t replace cutting carbon emissions

And we agree.

Net-zero sustainability plans that include offsets cannot replace needed emissions reductions and fossil fuel phase-outs. However, carbon offsetting should be one part of an entire sustainability plan and can help offset emissions that an organization does not currently have the tools or technology to stop emitting. 

The truth is that carbon offsetting is incredibly effective if it meets standards and is additional, and permanent. Carbon offsets go beyond reducing our overall GHG and carbon emissions by:

  • Improving air quality: Did you know that in 2009 the U.S. government declared threats to public health and welfare due to hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)? By reducing emissions we improve public health by reducing lung cancer, asthma, and other respiratory allergies and ailments.
  • Protecting our ecosystems: By protecting forest habitats, agricultural land, aquatic ecosystems, and overall biodiversity we are contributing towards a healthy ecosystem and are providing cleaner air, water, and food.
  • Creation of green jobs and opportunity: in 2019 the renewable energy sector employed over 11 million people with jobs. These opportunities will continue to increase through carbon offsetting, including in traditionally underserved areas.

Offsetting is just an excuse to continue polluting

We’ve heard it time and time again, “Companies who buy carbon credits intend to continue polluting without any regard for the environment.”

But… the data suggests quite the opposite – believe it or not, corporations that leverage carbon offsets are more likely to reduce their overall emissions. 

The CDP Climate Change Report 2016 found that companies that bought voluntary carbon credits also made more ambitious emissions cuts compared with companies that did not. 

Additionally, a 2017 analysis by Ecosystem Marketplace found corporations that used voluntary carbon offsets tended to do so as part of a larger strategy to reduce overall emissions. Their report states:

“Our research shows the opposite: namely, companies are purchasing offsets as one of many ways to fulfill their carbon reduction obligations. Those companies that do buy offsets are doing so as part of an overall carbon management strategy and they mostly use offsets to tackle emissions they can’t eliminate internally. Some companies, like Disney and Microsoft, have created an internal “price on carbon,” where the company charges itself for every tonne of carbon it produces and uses that income to purchase offsets. The idea is that incorporating carbon into the company’s bottom line will focus attention on emissions and accelerate reductions.”

why carbon offsets don't work

Large companies get tax benefits from offsetting.

It’s true that many companies actually leverage carbon offsets as a way to “tax” themselves. Paying for offsets is expensive, so by becoming more sustainable overall and lowering emissions in other ways, the number of offsets required reduces, which in return reduces the amount of money spent on offsets. It’s a great way for brands to hold themselves accountable. 

A great example of this strategy is Walmart Canada, which is calculating and offsetting all of its last-mile delivery emissions while they work on being able to deliver its products emission-free one day.

“Funding carbon offsets for last-mile delivery in our eCommerce operations is an opportunity for Walmart to make an impact today as we work towards becoming a regenerative company and eliminating emissions across our business,” said Laurent Duray, SVP of Ecommerce, Walmart Canada. “Minimizing the environmental impact of the last mile has been top of mind as customer behavior has shifted towards an increased reliance on our fast, easy, and convenient delivery options for grocery and online orders.”

Common Questions About Carbon Offsets 

Carbon offsetting is a complicated topic. We get it.

That’s why we’re going to answer some of your most common questions about carbon offsetting and its role in fighting climate change below.

What is a major limitation of carbon offsets?

There are two main issues with carbon offsets. One is that they are not a comprehensive solution and only one tool for reducing emissions. Many organizations do not have the tools internally to create a holistic net zero plan and must invest in becoming greener.

Second, globally adopted carbon standards do not exist. Europe, the United States, and other countries have their own versions of standards but policy adaptation needs to be addressed. 

Do carbon offsets promote greenwashing?

We won’t tiptoe around this one, some carbon offsets can and have been guilty of promoting greenwashing. 

Like any system, carbon offsets can be abused. 

There are cases of corporations who have used offsetting to appease environmentalists and appear as they care about the environment, all the while their actions might suggest otherwise. 

Especially since it can be cheaper to offset than reduce emissions in other ways…

This includes companies that couldn’t previously be bothered to think about climate change but have since scrambled to look good and in doing so can get swept up in the ease of procuring and marketing carbon offsets. 

However, rest assured that greenwashing of carbon offsets is less of a concern now than it was 10 years ago, especially for voluntary offsets. Today, those who are actually leveraging offsets tend to use them in the way they are intended: to go beyond their internal reductions by offsetting emissions that are too costly or impossible to address with today’s technologies, otherwise known as residual emissions. 

Apple’s Environment Progress Report is an incredible example of how carbon offsets played their role in a corporate-wide effort to reduce emissions and become a greener organization by 2030.

“By 2030, we’re committing to total carbon neutrality. We are already carbon neutral for our corporate emissions, including corporate travel- resulting from our use of 100 percent renewable electricity for our facilities and investing in high-quality projects that protect and restore forests, wetlands, and grasslands. And we’re well on our way in our supply chain. But we’re going further to cover our entire, end-to-end footprint. Down to the shipping that moves our products around the world, and the energy used to power our customers’ devices.”  

How many trees does it take to offset a ton of carbon?

We love climate math.

On average, a tree can offset 21.77 kg CO2 to 31.5 kg CO2 in one year. This means that to offset 1 ton of CO2, it would take 31 to 46 trees.

What are some examples of carbon offsets?

Carbon offsets fund specific projects that either lower CO2 emissions, or “sequester” CO2, meaning they take some CO2 out of the atmosphere and store it in carbon reservoirs or sinks. 

Some common examples of projects include reforestation, building renewable energy, carbon-storing agricultural practices, and waste and landfill management. 

Do carbon offsets help the environment?

Carbon offsets DO help the environment. By reducing or removing carbon and other GHGs from the atmosphere that increases the Earth’s temperature, offset projects help to mitigate climate change. 

In addition to this, maintained carbon offset projects are able to improve the overall health of the ecosystem and the project’s local community. 

Benefitting the environment and local communities? 100%, yes! 

What are carbon offsets used for?

Carbon offsets are credits purchased from carbon offset projects that are designed to reduce emissions of planet-warming greenhouse gasses.

How do carbon credits reduce emissions? 

Carbon credits reduce emissions as the projects credited implement actions to increase the sequestration of climate-warming emissions into carbon sinks or by reducing the emission of GHGs from sources such as landfills or farms. 

Conclusion: Carbon offsets are an important part of the big picture

We said it once, and we’ll say it again. 

Carbon offsets are integral and should be part of a greater sustainability plan, not the only solution.

However, they have criticisms for good reason. These criticisms highlight the need for quality carbon offset projects that have a positive impact on the environment and global policy reform to aid in effectively mitigating carbon emissions.

While it’s true that not all carbon offsetting projects are created equal, these important critics give us reason to use the tools available to evaluate and ensure offsetting projects we support are mitigating GHG emissions additionally, permanently, and positively impacting both the environment and local communities.  

Learn more about EcoCart’s projects and how we select them.

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