Carbon offsets and our sinking ship

“One of the illusions of life is that the present hour is not the critical, decisive one.”

Ralph Waldo Emerson.

We are pretty inept, as humans, at looking at the big picture. We live in timelines where next month seems a long way away – let alone the next generation. This lack of big-picture thinking hinders our climate action, epitomised perfectly by the carbon offset market. 

The climate economy is slowly gaining strength, and with that comes a whole market to benefit the wants of the same short-term thinking that got us into this mess. Credible solutions exist out there, and I can agree that part of the solution is to suck some of the carbon out of the atmosphere, especially as the fossil fuel industry continues to grow

However, Carbon Removal projects in their early stages are inefficient (emitting more carbon than sequestered), expensive, and therefore currently inadequate. Carbon offsets are thus the go-to for businesses to achieve an affordable balance of carbon. Unfortunately, there are problems with balancing this way. 

My dad once put it great. Carbon offsets are like having a hole in your boat and emptying the water with buckets without considering fixing the hole. Potentially, the biggest danger of offsets is that they give the big carbon-emitting companies an excuse to relax, to let the ship continue leaking water. But the truth is right now, offsets are not even close to touching the sides of global emissions. (Imagine using a teaspoon to keep the water from filling up the boat) 

Reality check: we are sinking and panicking to act.  

The word “offset” in itself frustrates me. Much like the word “resilience” annoys me. Both terms are chucked around in business sustainability. “Offset” and “Resilience” imply a certain degree of acceptance of the bad stuff. It feels like the world has flipped from climate denial to climate doom – why did we skip the phase of radical action? 

We have accepted that carbon emissions are going to exist (the world is stuck how it is) and, thus, the climate apocalypse is inevitable. Instead, let’s act, let’s get the masking tape out and block that hole. We need to tackle the emissions at source and make it unacceptable to be complicit.

So… what exactly goes into creating a carbon offset?  I had a deep dive into the murky world of the offset market to find out just how easy it would be to offset some emissions.

As quoted by a potential offsetting partner, to offset a tonne of carbon would cost no less than £2.25 in India (outrageously cheap). This project was supplying a community with a Renewable Solar Farm – an awesome cause for sure. However, doesn’t it feel weird that a big oil company could mine a well of carbon sludge, export it and burn it only to claim that it has balanced those emissions by purchasing solar power 5000 miles away? 

We run into similar issues with REGOs and the ‘Renewable’ Energy tariffs you receive here. Company X will purchase 100 GigaWatts of wind power produced by a wind farm in France (supplying the local French grid). This 100 GigaWatts of renewable energy is then sold back to the consumer in the UK as renewable energy – regardless of the grid supply received in the UK (currently only 30% renewable supply at the time of writing – check here for the latest update).. This system of offsetting energy usage is fundamentally f**ked because it does not recognise the actual emissions burned on-site, and instead allows companies to turn a blind eye to its actual impact.

Therefore, an organisation can achieve Net Zero carbon emissions for its energy usage on a technicality of the energy companies offsetting their own emissions… seems like we are running in circles right?

All of this is in the pursuit of quick-win commercial sustainability. Net Zero should not be a balancing act awarded to those who can stay afloat in choppy conditions. 

What we really need is transparent, effective action that doesn’t simply treat the symptoms but helps to rectify the cause itself.

So what should companies do?

  1. 1. Put your money into decarbonising your emissions. Invest in initiatives that actively reduce your Scopes 1 & 2. If you have a budget of £1000 to offset, this could instead be (more wisely) invested into energy efficiency projects.
  1. 2. Pursue Scope 3 reporting and reductions that do not rely on transaction-based emissions reporting. Achieve insight into actionable reductions by working with your supply chain, identifying high-emitting operations and making calculated decisions on what is achievable.
  1. 3. Act fast. 2030 Net Zero goals will come around soon. Do not wait until tomorrow, next year, or five years to reduce your impact. Get to work now and fix the boat before we sink. 

What Should Governments Do?

At the risk of getting too political here, I believe that ‘business’ alone should not bare all of the responsibility to act (partly because we need intervention to enforce accountability).

A fundamental issue with the current status quo is that the ability to offset your emissions via renewable energy offsets is complicit to a system that says “normal” is still an energy system run on fossil fuels. This is not sustainable, therefore it should not be the norm. We need to ensure that there are more ways for this to be funded than relying on the murkiness of the carbon market. Governments, Banks and NGOs need to mobilise and invest in grants to support this. Personally I believe this should be the first thing on any new government’s manifesto to run the country, as our current grid struggles to keep pace with any new renewable energy supplies.

The Carbon Tax market is now worth $100 billion, with 23% of Global emissions now covered by a taxing system in economies like Austria and Indonesia. Could taxing carbon emissions be the only viable initiative of the next ‘green agenda’, that could also contribute to bridging some gaps in public spending? Incentives that reward carbon restriction are good and utilise market forces to ensure carbon emissions are addressed. Personally – I believe that it is only when creating emissions becomes economically unfeasible for any corporation, that we will see real action.