I’ve felt uncomfortable with much of the “carbon offsets” industry for a long time going back to before we wrote the Procurement with Purpose book. It always seemed to me – as a scientist by training – that there were too many logical flaws in the whole concept.
If you want to truly offset you own carbon emissions as an organisation, you need to make sure that the actions you take or pay for genuinely remove real carbon from the atmosphere. But many offsets seemed to either notionally stop more carbon being emitted; or they were purely speculative projects that might eventually (but not now) allow emissions to be reduced or carbon to be removed from the atmosphere.
It also seemed obvious that the area was ripe with potential fraud. If all a company wanted to do was make the claim that “our business is carbon neutral” by getting a certificate saying it had paid for offsets, then obviously some unscrupulous folk would be happy to provide the firm with the certificate. No questions asked, and at a competitive price. It might not be in the firm’s interest to actually dig too deeply into what was really happening and whether the offset provider was delivering real carbon reduction.
But now, we are seeing more questioning of offsets. We reported on EasyJet last year year moving away from that approach, and this week we saw a new piece of research carried out by the Guardian newspaper along with the German weekly Die Zeit and SourceMaterial, a non-profit investigative journalism organisation. It has raised more questions about offsets and their effectiveness; as tthe Guardian says,
“The research into Verra, the world’s leading carbon standard for the rapidly growing $2bn voluntary offsets market has found that, based on analysis of a significant percentage of the projects, more than 90% of their rainforest offset credits – among the most commonly used by companies – are likely to be “phantom credits” and do not represent genuine carbon reductions”.
Many leading firms including Gucci, Salesforce, BHP, Shell, easyJet, Leon and even rock band Pearl Jam were amongst organisations that have bought rainforest offsets approved by Verra. But whilst the work does not allege fraud or criminality, it does question whether the benefits claimed – and the outcomes paid for by those buying credits – are real.
The research was based on new analysis of scientific studies of Verra’s rainforest schemes. Many of the rainforest projects (the outcomes of the offset programme) show little or no evidence of actual and measurable deforestation reduction. The threat to the forests is also often overstated at the start of projects, which then presumably exaggerates the benefits of any work. And in at least one of the projects, there were serious concerns about human rights issues.
“The Guardian visited a flagship project in Peru, and was shown videos that residents said showed their homes being cut down with chainsaws and ropes by park guards and police. They spoke of forced evictions and tensions with park authorities”.
Paying people not to cut down forests has some intrinsic difficulties, including how to establish a meaningful baseline and then a credible counter-factual (“what would have happened if we had not started this project?”)
To draw a slightly tongue-in-cheek analogy; I know a great way to reduce the number of burglaries in my area. Let’s just pay everyone £500 a year if they promise not to commit a burglary. That’s ridiculous of course – I had no intention of becoming a burglar – in line with 99% of my neighbours I assume! And anyway, how would you check that we hadn’t broken that promise?
Offsets based on “stopping deforestation” share some similar issues. How do we know that the trees would have been felled if the payment had not been made? And then how do you check the recipients are fulfilling their promise? Do you have to pay them every year not to chop the trees down? What if they leave that area untouched – but go and chop down trees in the adjacent forest?
I do accept that we need to work with indigenous populations in particular and money will need to be spent to support countries and individuals to help reduce deforestation. But “give me money and I won’t chop these trees down” is not the best way of doing that. Other forestation projects do lead to new trees being planted – but even there, we see some issues (see another article we wrote on that topic).
It is good news actually that these tools and activities around carbon reduction are being questioned more closely today. “Greenwashing” in its various forms is a major threat to successful climate action, so rigour is important. There is probably some role for offsets and offsetting – but users need to analyse potential projects and ensure they really do deliver tangible results and benefits.
Otherwise there is reputational risk of being associated with dubious schemes. Shell told the Guardian that using credits was “in line with our philosophy of avoid, reduce and only then mitigate emissions”. That is sensible. But we really need firms to be doing more in terms of “avoid” and “reduce” and not rely on somewhat dubious “mitigate” actions.
And yes, this is yet another interesting but challenging topic for sustainable procurement professionals to get stuck into – good luck!