What is carbon offsetting?

Carbon offsetting can be defined as reducing or sequestering carbon emissions in one area in order to compensate for carbon emissions made in another area.

For example, to compensate for the emission of one ton of CO2, someone may plant a tree that is expected to remove one ton of CO2 from the atmosphere over its lifetime. Carbon offsetting is commonly practiced across all scales of society from individuals to businesses to governments in order to achieve the appearance of overall net-zero emissions in operations where direct emissions remain greater than zero. 

The contested role of carbon offsetting in the planet's path towards sustainability has been receiving increasing attention in recent years. While some influential figures such as Bill Gates promote it, others such as Greta Thunberg have simultaneously warned of the dangers associated with relying on it. Like most environmental issues, carbon offsetting is a nuanced topic.

What's the problem with carbon offsetting?

For the most part, the work carried out within carbon offsetting projects (most commonly tree-planting and providing greener energy supplies to impoverished communities) is undoubtedly environmentally and socially beneficial. However, when this work is misinterpreted as a reliable way to excuse and offset emissions, numerous problems are created.

• The quantity of emissions that will truly be 'offset' by nature-based projects such as tree-planting is highly variable depending on factors such as the type of ecosystem, type of tree, and level of surety that the tree will safely reach its predicted lifespan - it is therefore difficult to reach any reliable estimate as to how effective these projects will be at sequestering carbon.

• Nature-based projects such as tree-planting reduce carbon gradually over decades - although they will help over time, they cannot adequately compensate for the immediate effect that carbon we emit today has on our climate.

• Oftentimes, projects used for offsetting such as designating forests as conservation areas would have occurred regardless of the financial input of offsetters. If a project is not 'additional,' or could reasonably have been accomplished without a backer's funding, savings in emissions should not be credited to that backer.

• The misguided idea that offsetting offers an easy solution to deal with emissions can dissuade governments, businesses, and individuals from taking more meaningful actions to address climate change.

How do I know if an offsetting project is reputable?

There are several agencies that conduct independent verifications of the quality of offsetting schemes. While the approval of a reputable third party such as Gold Standard or Verra is certainly a plus, it does not always guarantee quality; you should also investigate offsetting projects yourself before investing in them.

Here are some questions to consider before investing in an offsetting scheme:

• How exactly will my money be used?

• How are they calculating the quantity of emissions that will be saved?

• How are they guaranteeing that the project will successfully achieve these emissions savings? E.g. in a tree-planting scheme, how are they guaranteeing that the trees planted will remain standing long enough to sequester the advertised amount of carbon?

• Would this project’s savings in emissions likely have been achieved anyway regardless of my contribution?

• Is this project's quality verified by a reputable independent third party?

If a project does not provide detailed information or adequate answers regarding any of the above areas, your contribution is unlikely to make as much of a difference as you are hoping for. It would be best to consider other schemes.

What should I do now?

Carbon offsetting is certainly not fruitless. If you choose the right project, your money can make a difference. However, the limitations of offsetting must be recognised. While it can have positive impacts, offsetting should never be seen as a primary solution in and of itself to our environmental problems.

The best thing you and your company can do to help the planet is take steps to directly reduce your emissions as much as possible - this has a much more definite measurable impact compared to offsetting. Only after achieving this, consider investing in a reputable scheme to offset any remaining emissions that absolutely cannot be reduced any further. To ensure the best chance of success, always aim to buy more offsetting shares than what you theoretically need.

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