The Problem with Carbon Offsets (SSIR) (2024)

FAQs

What is the problem with carbon offsets? ›

When the trees within a carbon offset project are burned or knocked down, for example, they release their stored carbon back into the atmosphere. Those emissions should be deducted from the project's benefits. “All of that carbon goes up in smoke,” Sills said.

SUMMARY OF ARGUMENTS FOR AND AGAINST CARBON OFFSETS:

Everybody must play their part to avoid the most catastrophic impacts of climate change. “The power of offsetting allows everyone to measure their footprint and impact, and then to find immediate actionable ways to reduce that impact,” stated one speaker.

Businesses are using it to greenwash their operations

Organisations like Greenpeace and Earth are now taking businesses to task for using carbon offsets to detract attention from the environmental damage of their actual business operations.

But one of the main limitations of carbon offsetting is that purchasing a carbon offset does not directly reduce your carbon footprint. It only makes others reduce their carbon footprint to compensate for your carbon footprint.

While forest protection should provide a win-win situation, benefiting both biodiversity and climate, it can too easily become lose-lose, because carbon offsets allow emissions to continue, worsening global heating and threatening not just forests but all natural ecosystems.

There are two primary criticisms of carbon offsets: (1) the effectiveness of the offsets is sometimes inaccurate and/or misleading, and (2) offsets divert from the long-term actual reduction of carbon emissions by polluters.

This approach to carbon offsetting has been the subject of controversy in the industry because it relies on hard-to-verify assumptions that a particular stretch of forestland would be cut down if it wasn't being protected by a paid-for carbon credit.

Arguments against carbon pricing include the potential negative impact on carbon-intensive industries and how it frames climate change as a market failure instead of a fundamental system problem.

Countries, states or industries with targets to reduce their emissions may buy offsets from other countries, states, or industries where greenhouse gas reduction is cheaper. This can make it cheaper overall for the world to meet its emissions targets.

Offsetting provides an excuse for avoiding real emission reductions and can create a dangerous mirage of 'climate neutrality' when emissions are actually rising. It can also lead to greater emissions once carbon is rereleased into the atmosphere from temporary stores.

What are the disadvantages of carbon credits? ›

Cons. Complex Earth systems are poorly understood so calculating carbon emissions and their consequences gives a false impression of certainty. Current carbon trading arrangements take little account of precaution, tipping points, deadlines or co-benefits so are often wasteful and/or perverse.

One of the key benefits of carbon offsetting is that it can help reduce greenhouse gas emissions and mitigate the effects of climate change. By supporting projects that remove or reduce emissions, carbon offsetting can help balance out the emissions that an individual or organisation is responsible for.

A carbon offset broadly refers to a reduction in GHG emissions – or an increase in carbon storage (e.g., through land restoration or the planting of trees) – that is used to compensate for emissions that occur elsewhere.

The secretary-general of the United Nations called out the use of CCS by fossil fuel companies as greenwashing [9]. The executive director of the IEA recently implored companies to abandon the 'illusion' that CCS is the solution [10].

The term describes companies that either selectively or inaccurately report their climate and sustainability-related activities. Recently, a variety of new guidance around climate-related ESG reporting has been published to tackle greenwashing and provide stricter guidelines for disclosure.

Greenwashing refers to the deceptive or misleading practices used by companies, organizations, or individuals to create a false perception of being environmentally friendly or deceptive practices related to claims of carbon neutrality or offsetting carbon emissions.

Greenwashing manifests itself in several ways – some more obvious than others. Tactics include: Claiming to be on track to reduce a company's polluting emissions to net zero when no credible plan is actually in place. Being purposely vague or non-specific about a company's operations or materials used.