Rather than buying a clean conscience with carbon offsets, let’s be conscious of the actual costs of our emissions and support solutions that address the causes as well as the impacts of global warming.
Everyone agrees we need to better understand and reduce our CO2 emissions. A big question and controversy, however, is around what we should do about our remaining, unavoidable emissions.
Traditionally, the only option has been for individuals and organizations to become “carbon neutral” by purchasing offsets from a carbon offsetting company (e.g. TerraPass, Native Energy, or Climate Trust) within what is known as the Voluntary Carbon Market (VCM). VCM companies purchase the right to claim the CO2 mitigation from reforestation, energy efficiency, and renewable energy projects and then resell these rights as carbon credits so consumers can claim they have “neutralized” or “mitigated” the emissions from their activities.
With over 100 carbon offset companies, the VCM grew to $572M in 2011 and, since 2005, has transacted over $3B of carbon offsets (at an average historical price of $5.9/tCO21) to support mitigation projects, especially in developing countries.2 Despite its success, offsetting has a number of critical challenges:
- Inefficient: Due to verification costs, overhead, and profit-taking by third party certifiers, as little as 30% of funds make it to actual projects.3
- Large and Non-local: To achieve an economy of scale, the VCM is constrained to supporting large projects often at a great distance from offset consumers.
- Lack of Trust: Over 50% of respondents to a Point Carbon survey believe offsetting does not produce real reductions and 70% believe offsetting companies are not transparent in their dealings.4 Only 35% of respondents to a Mintel survey trusted claims of “carbon neutrality.”5
- Lack of meaning: Due to their distance and lack of transparency, offsetting tends to have little significance or value to consumers.
- Negative “Story”: Offsetting is often unfavorably equated with greenwashing and 16th century “indulgences”, where parishioners were able to pay the church to absolve them of their sins while delaying meaningful action.
- Lack of “Additionality”: To be valid, carbon offset projects cannot result from “business as usual” and must happen only with funding from offsetters. This is often very difficult to prove and some claim as little as 30% of offsetting projects are, in fact, “additional” and that up to 70% would have happened even without offset funding.
- Leakage: While standards and measures of accountability have improved, there are persistent concerns around “leakage” where negative environmental impacts of a project are simply moved elsewhere rather than mitigated.
- Inadequate Pricing: Pricing carbon within the VCM creates perverse incentives and limits how we think about and respond to our carbon emissions.
Recognizing these challenges, Earth Deeds has developed a new option called “onsetting” that drops the controversial claim of carbon neutrality and enables funding to go towards local and meaningful sustainability projects that are responding to climate change. Using Earth Deeds online tools, participants in a group event or activity can...
- measure and reduce their group-related CO2 emissions via custom calculators,
- contribute funds to account for the social cost of their impacts, and
- transfer collected funds to sustainability projects of their choice.
Onsetting resolves the problems of the VCM and offers the following benefits:
- Support of Small, Local Sustainability Projects: This can include projects that do not directly mitigate carbon emissions but have meaning to them and their local communities, such as creating local food systems, preserving biodiversity, and fighting for climate justice.
- Increased Efficiency: By avoiding costs associated with third-party verification, traders, consultants, and other middlemen, at least 85% of funds can be sent to the projects.
- A Positive Story: Rather than guilty indulgences, onsetting says, “Let’s be grateful for what fossil fuels have allowed us to accomplish; let’s recognize and internalize the environmental costs in burning these fuels; and now let’s pay-it-forward to help create sustainable and resilient communities and ecosystems.”
- Connecting to Real Impacts: Rather than pricing carbon based on market forces, Earth Deeds prices emissions based on the best scientific estimate of their actual costs. Doing so helps users understand and respond to the real impacts of their emissions. More information on how Earth Deeds prices carbon can be found here.
- Trust in the process: All transactions are transparent, use of funding is local and visible, and concerns around additionality become irrelevant.
Let’s move beyond the idea that we can “neutralize” our environmental impacts at a distance and create new mechanisms to account for the true costs of our impacts and efficiently channel money to sustainability projects that are creating sustainable communities and ecosystems.