Why I do not buy carbon offsets

I do not buy carbon offsets.

The carbon offset is now big business. Plenty of people are being offered carbon offsets when they book air travel. In a moment of environmental concern many people do sign up. I do not recommend that you do buy a carbon offset . These are my reasons.

  1. We do not really understand how to offset carbon dioxide. You can plant a tree, but it has to be the right tree in the right place, otherwise you may well release as much carbon as you will save by ploughing up the land.
  2. Carbon emissions that you create stay in the atmosphere for one hundred years. What guarantee is there that the projects your carbon offsets invests in will remain for a hundred years? What happens if, for example, that the trees planted are cropped for biomass? Back goes the carbon!
  3. Third world renewable energy projects do not offset carbon. You can invest in a new third world renewable energy project, but that assumes that the third world project would have gone ahead with a fossil fuel alternative, had it not been for your investment, which is not the case.
  4. There are no proper regulations governing the institutions that sell carbon offsets. You could well be buying nothing at all.
  5. The range of prices of so called carbon offsets varies so much and this in itself must cause suspicion.
  6. There is no transparency in the carbon offset business. How much profit do the banks, airlines and carbon offset companies make from your money which you expect to be applied towards doing environmental good? How much is left in the till after all the commissions profits and the rest have been removed?

So, in essence, if you buy a carbon offset you will buy something that may not offset carbon, where there is no regulatory control and where there is no transparency. If carbon offsets were offered for sale by the more dubious type of direct selling businesses, no one would buy them. The fact that they are offered by reputable institutions makes them appear respectable, but I do not think they are.

JP Morgan (Mr Tony Blair’s current employer has recently purchased Climate Care, a business that deals in carbon credits. What environmental credentials does JP Morgan and Mr Blair have? Climate Care state, on their website, that “the UN’s Clean Development Mechanism (CDM) has set rigorous standards for project validation and verification and credible project standards for voluntary emissions reductions have been launched.”

The CDM’s standards do not actually work in the way climate care claim. They finance projects that may have taken place in any event, even without the carbon credits that the CDM brings. In addition the CDM standards do not take into account the complete environmental and ecological effect of the projects from which the credits are derived. The CDM’s standards are not a benchmark of projects that provide genuine carbon emission reductions.

The carbon offset industry is big business. It is based on a fallacy that it reduces emissions. I do not think that it does. What it does is to provide charitable help for many worthy projects.

I do not recommend that you buy carbon offsets. It is far more effective to think about reducing your emissions in the developed world, rather than offsetting emissions in the developing and undeveloped world which run at a fraction of those in the developed world.

Charity is a very good thing but it should not be confused with offsetting carbon dioxide emissions. That is why I do not buy carbon offsets.

9 Responses

  1. Hi Robert. I share your concerns about carbon offsets that are supported by projects in the developing world. I’d encourage you to take a look at the website of a company that I’m involved with, Carbon Retirement. We offer the opportunity to retire EU Emission Allowances, which reduces the cap on emissions for industries in the EU ETS. We feel this approach addresses the concerns you’ve raised.

    The website is at: http://www.carbonretirement.com.

  2. Robert

    I disagree with most of the things you say.

    1. Trees
    Yes it is perfectly valid to say that the tree might die, so if you are buying offsets involving trees (then assess how survival is rated). It is extremely uinlikely that all trees will die at once! Also at the moment it is the only way of getting co2 out of the atmosphere. Plant them in tropical countries where they grow faster and very often provide additional benefits. If you don’t like trees as an offset then don’t do them – most offsets do not involve trees.

    2. Third World Energy Projects

    Whilst I have some concerns about Indian Wind farms and the additionality surrounding these, there are huge numbers of community based clean energy projects to chose from – these absolutely would not have happened without carbon finance (Climate Care and Carbon Clear invest in projects at source, the latter often providing 100% of the finance).

    3. Leakage

    Your point about the carbon credit you buying not being permanent – well then buy carbon credits that have been delivered or from a reputable company. This is how Carbon Credits at their best work
    – Carbon project developer invest sin a project
    – That project gets accredited by VCS or CDM (proving that it is delivering verifiable, permanent, additional carbon credits)
    – Every year an inspector from Bureau Veritas / SGS or a quality audit company vistis the project and calculates the number of credits available for sale
    – These are what you are buying – Bureau Veritas / SGS have no reason to lie.

    4. No regulations

    Mmm. More difficult this one. This is where you need some knowledge.

    Buy only credits that are accredited to a standard (VCS, CDM). Check who verifies the credits each year. Then alos check that the company who is selling them has a registry and who audits this registry (a registry will tell you effectively how many credits have been bought and how many have been retired – they shoudl of course balance).

    5. The Prices Vary

    Yes – because the costs of getting the projects up and running vary AND the costs of getting them accredited and verified each year vary.

    Lets make this easy – imagine you are developing a project in Sudan or the Congo – it is very expensive to get people in on the ground and get verifiers there. You may also be budgetting for interruption and some element of risk – all of which drives the price up. On the other hand a biogas project in India (where you effectvely dig a big pit, put in a brick container which then collects waste and generates gas) may be easier to complete and get verified. The risk of interruption is lower and therefore the credits are cheaper.

    6. Transparency

    OK so you work for free then do you! If the charitable sector can do this, invest in the sales and marketing infrastructure to get people to buy, create effective communication strategies to convince people like you that they are valid AND take the risk in investing in projects where there might be no return (the project might fail or underperform and therefore no credits can be sold and revenue generated) – then great. My question is why haven’t they… There are a few none for profit offsetters but thene they simply buy off brokers.

    7. Reduce and dont buy offsets

    Absolutely agree that everyone needs to reduce their emissions – spot on! However, time is running out – we need to do everything in our armoury to reduce emissions – and you will be producing them.

    A much better place for you to start is to educate people how to validate high quality offsets. It is not difficult.

    Offsetting will not be a panacea for climate change – even the offsetters state that – but it is one of about 10 tools that we have to mitigate climate change. And just as you should educate yourself about what you can do to reduice your emissions, I suggest that you look further into understanding the industry and helping others to do the same.

    As for the other post who recommends buying EUTS’s. What can I say – the good is that by buying these up one is driving up the cost of carbon, increasing the cost of pollution. The bad is that you have absolutely no idea what you are buying and what has created them. For example, it could be you and me using less electricity, installing solar power/wind turbines and so forth thereby allowing the big energy users to generate lss power from fossil fuel sources and enabling them to sell their excess EUTS’s. Alternatively, perhaps a little bit of recession might cause a reduction in pwer consumption and a realeas of EUTS’s onto the market.

  3. James you make some interesting points.
    Trees: trees are not a foolproof way to offset carbon – far from it.
    Third world energy projects: great for charity, great for the third world but building say wind turbines in the third world does not offset carbon unless the turbine replaces a power plant, which it rarely does.
    Leakage: however reputable the company they cannot guarantee what will happen for 100 years.
    Regulations: not all carbon offset suppliers work to these standrads and tevn where they do the standrads are faulty.
    Prices vary: I understand the point but surely some projects are better than others in actually reducing carbon emissions.
    Transparency: My company publishes accounts from which people can see our margins and our expenses. I don’t know and have no way of finding out how much of the carbon offset goes to an actual project in many cases. Charities also publish accouynts so if people do not like the admin charges they don’t donate.
    I think that donatimng renewable energy to the third world is ABSOLUTELY ESSENTIAL. It is our moral duty (having spoiled the climate for them without them having a benefit. I cannot praise some of the projects too highly. Others are simply not in my view carbon offsetting.
    The carbon offset industry runs the risk of making people think that by paying a few piounds they have done their bit. they haven’t; redcing their own carbon fooptprint is much more important, so that carbon offsets in the grand scheme of things, are a bit of a side show, aren’t they?

  4. You don’t have to buy any, get some for free:

    http://www.freecarbonoffsets.com

  5. Rich people’s game!!! micky mouse figures like stock market!!!!

  6. The trouble is that even a game with Mickey Mouse figures gets played by not so rich people. However, calling it a game is probably unfair – although I wish we were shown transparency of the figures.

  7. I agree. I won’t buy carbon offsets – they seem like a scam to be.

  8. They doi not do what they say on the tin!

  9. I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you down the road!

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