Over the years I’ve had a lot of people ask me my thoughts on carbon offsets. Now we are in the time of summer holidays (though many of us are of course not taking them) I decided to sit down, do some in-depth research, and learn more about the world of offsetting, so I could have a more thorough answer to these questions.

Here’s what I found.

What is carbon offsetting?

Carbon offsetting is a voluntary form of carbon pricing, where someone chooses to pay to compensate for the greenhouse gas emissions they generate. In practice, it looks like calculating emissions, then purchasing equivalent ‘credits’ (one credit usually accounts for one tonne of carbon) from projects that prevent or remove the equivalent amount of greenhouse gas emissions elsewhere. 

Carbon offsets are often purchased by air travellers, who pay a premium based on the carbon emissions generated by their flight. Voluntary uptake is low, with only around 1% of airline passengers choosing to offset their emissions, but regardless the market has seen 140-fold growth since first becoming popular. It was valued at over $500 million a year in 2019, while in 2020 the size of the global market was estimated to range between $40 billion and $120 billion. It is said that, since 2005, 430 millions tonnes of emission reductions have been generated.

Several fuel-intensive airlines, such as Emirates, Qantas and BA, currently offer offset schemes, alongside other notable companies including:

Carbon offsetting projects

So what kind of projects do offsets fund? Large offset certifiers include American Carbon Registry, Climate Action Reserve, Gold Standard, Plan Vivo and Verra, offering hundreds of projects between them. The carbon price of each project depends on where they are and the benefits they offer. 

There are three main forms of offsetting: reducing emissions through investing in renewables (such as solar and wind farms), contributing to international projects that aid the environment, and carbon sequestration (such as tree planting), with many companies using a combination of schemes. For example, the airline Qantas’ offset schemes include native forest protection in Tasmania, wind power in China, more efficient wood stoves in Cambodia, and replacing fossil fuels with biomass for powering cement plants in Thailand. In 2012, 34% of the offset market was spent on renewable projects and 32% on sequestration. 

Projects have also been created that focus on other greenhouse gases, particularly methane. Cows are large sources of methane, so projects have been developed to convert manure into biogas, while some Californian dairies have large machines that suck up methane and convert it to biofuel.

While this may seem like a pretty clean-cut good system, there’s also a lot of complexity that we need to consider.

The issues with offsetting

Measuring difficulties

Before offsets are even purchased it’s both difficult to measure how much carbon dioxide a journey may emit, making it difficult to know what your offsets account for.

But even trying to establish how much you emit on a journey is hard. Some offsetters take into account the extra impact of flying at an altitude above 35,000 feet; others look at the age of the aircraft type you are likely to fly in, whether you travel business class, any stop-off points and how full the plane is likely to be. 

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Offsetting doesn’t prevent emissions

Once we do try to put a price on our emissions, offsets themselves don’t force their buyer to actually meaningfully change any of their operations. Many people have compared offsets to recycling programs, which can encourage people to continue to buy single-use items instead of shifting to reusing what they already have. Instead of allowing companies to feel complacent or like they are now allowed to pollute, people argue that more energy should be focused on the prevention or mitigation of greenhouse gas emissions instead.

Offsets can imply that our choices won’t have a negative net effect, or that companies have cleaned up their act. Providing carbon offsetting options can be great PR for companies, as they seem greener without having to actually reduce their emissions. They’re a short term solution that simply postpones the more pressing action: phasing out fossil fuel through changing the energy grid, manufacturing, and agriculture while investing in decarbonised transport options like more trains and public transport.

Carbon offsets are a greenwashing mechanism that enables individuals to buy themselves green credentials without actually changing their consumption habits, and nations to avoid the more difficult structural and regulatory change necessary to prevent further global warming.

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This is the reason why Heathrow airport, whose third runway will be able to take an extra 265,000 flights a year, can use offsets to say it will be “carbon neutral” by 2030 and “zero-carbon” by 2050, even though the level of emissions created will be catastrophically high.

Is it an effective use of money?

It’s also difficult to discern how effective these schemes actually are. For example, would a wind or solar plant have been built regardless of the financial contribution of offsets? If we’re unable to tell, has the offset actually done anything? To truly have an effect, any offset project must be in addition to other environmental projects that were already taking place.

Offset schemes located in countries that have already committed to reducing emissions are also likely to be double-counted, first as an offset and second as a reduction in the total national greenhouse gas inventory, but this reduction that would have had to happen anyway.

In this case, could this money not have been better used elsewhere?

That’s where it gets messy, says Barbara Haya, a research fellow at UC Berkeley, where she studies the effectiveness of carbon offset programs. “What would JetBlue have done if they couldn’t buy offsets?” Haya says. “Would they have put money into efficiency of the planes, or invested in future biofuels to create a long-term alternative to fossil fuels? That’s the fundamental question we have to ask for voluntary offsets: How much is it taking the place of real long-term solutions?”

Haya points to JetBlue’s investment in sustainable aviation fuel as a big plus, unlike some airlines that only buy the offset and continue with business as usual. 

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Problems with reforestation

The most well-known offset projects often involve planting trees. Ostensibly this seems like a good investment, and no one is arguing that reforestation is a bad idea, but it becomes complex once we tie it to offsets specifically.

Firstly, trees don’t reach their average carbon storage capacity until they are between 15 and 35 years old, and for forest offsets to really work trees must remain alive for a century. Because they’re at risk from fire, disease, storms, decay and illegal harvesting, it’s hard to know if any meaningful amount of carbon is really sequestered by using offset money for tree planting. It’s also difficult to calculate the amount of CO2 actually stored in a forest (it varies depending on tree species, soil type, amount of below-ground biomass and more, we could only definitely know if we cut the trees down and burned them to measure it), making it more difficult to quantify for offsetting.

Additionally, many tree planting projects fail completely.

Projects aren’t working everywhere… A 2019 investigation by ProPublica found Brazilian forest-based carbon offset projects failed because loggers cut down trees after the offsets were sold to US and European corporations. 

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One example of this is the fact that Austrian Airlines AG, EasyJet Plc and Virgin Atlantic Airways Ltd paid to have forests planted only to see that they had later been cut down, therefore nothing was actually offset. A 2017 – 2018 report on offsetting projects from Norway also said there was considerable risk of carbon leakage; when protecting one area leads to deforestation somewhere else. 

Additionally, local and Indigenous communities often have little say in these tree planting schemes, even if the results have direct impacts on their life. Schemes which prevent logging in tropical forests have been accused of harming the traditional ways of life of Indigenous and local people, without providing viable alternatives to keep them afloat.

These kinds of frustrations have undone forest offset projects across the world. They target rural residents who would otherwise cut down trees for fuel or to clear pastures for agriculture, but that only works if carbon sales provide a reliable alternative. They rarely do. Rubber from the reserve sells for about 2 reais per kilogram, barely enough for a cup of coffee, while a single cow is worth 800 reais, about $200.

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Some tree planting schemes have also been criticised for creating monocultures which then require fertilisers and herbicides that kill local animals, and displacing people.

Carbon offset funds that invest in renewable projects, for example, tend to perform significantly better as there is verifiable reductions in GHG emissions while others like some tree planting projects, seem to make no difference at all.

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Finally, some offset projects can also be outright scams. For example, the Vatican was presented with offset certificates for millions of trees that were never planted.

Promoting business as usual

While most people only fly occasionally, there is a small group who are very frequent fliers. Offsets can remove guilt or provide an excuse to carry on with business as usual by making buyers think they have fixed the issue. This is not the reality, however, and offsets can’t be used as an excuse to carry on as before. A carbon tax or well thought out frequent flyer levy could be far more effective in this area, as it allows normal people to have a holiday while focusing on the most destructive polluters.

Essentially, offsetting perpetuates the idea that unlimited growth is still possible (though we know it isn’t), individual footprints are the most important, and the moral responsibility for emissions can be shifted elsewhere. None of these things are true.

 If companies, governments, shareholders and consumers believe they can merely pay a few dollars to offset their carbon use then it is no wonder there is insufficient investment in railways, aviation demand management or decarbonisation research and development.

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Many schemes haven’t worked 

When we look at past studies on offsetting, the data doesn’t look encouraging. A 2015 paper found that 75% of the credits issued were unlikely to translate to real reductions, suggesting that if countries had cut pollution on-site instead global CO2 emissions would have been 600 million tonnes lower. A 2016 report found that 85% of offsets had a ‘low likelihood’ of creating real impacts, and a 2017 study of offsets 85% of offset projects had failed to reduce emissions. From 2021 the EU will stop allowing offsets to be counted towards emissions reductions targets, it’s not hard to see why.

Given the scale and timeline of the climate emergency, many climate scientists and activists believe that the focus should be on reducing emissions, not paying for CO2 savings elsewhere that may not be effective.

The benefits

That being said, it isn’t all bad news. Doing something is still better than doing nothing in regards to the environment, and some offset schemes do legitimate good. The main issues seem to prevail when we see offsetting as either a complete answer or an excuse to continue levels of pollution as before.

Ultimately, we can use offsetting as one component of the answer, or one tool in the toolbox. Not the only or best answer, but something that can be used in conjunction with other methods.
The goal is to reduce the total amount of greenhouse gases in the atmosphere, and legitimate offset projects do contribute to that.

If we use offsetting once companies have done everything they can to lower emissions, purchasing offsets will be better than doing nothing. As long as these offsets have third-party verification and we know the carbon-reduction they fund wouldn’t have happened otherwise, it can be a good opportunity to finance green innovation and technology.

The big push in California now is for forest regeneration (namely, planting more trees) and changing farming practices. Disney, ConocoPhillips, and Poseidon Resources bought $6.7 million worth of offsets to restore and replant a 100-acre parcel of a state park in the mountains west of San Diego. In 2018, the latest year for which data is available, such nature-based solutions accounted for a reduction of 100 million metric tons of CO2 globally, according to a recent report by the nonprofit group Forest Trends. That reflects about $300 million in purchased offsets.

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There are also suggestions that offsetting can help long term development by forcing carbon-intensive industries to adapt:

A Swiss livestock company, for example, sells a special garlic-and-citrus cattle feed supplement to help cows produce less methane, a powerful greenhouse gas. It just gained approval from Verra, a nonprofit that develops standards for carbon offset projects. Farmers who use the feed and lower their methane emissions can then, after an audit, sell the carbon credits as an additional source of income.

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Ultimately, while they can’t solve the problem on their own, what carbon offsets can do is help to buy is more time. Even if it’s just a few more decades, more time could help on the road to full decarbonisation.

So what do we do?

Ultimately, if you have the option to offset I still think it’s a good thing to do. We just have to be aware that offsetting isn’t a free pass to fly constantly, just as it shouldn’t be a free pass for highly polluting industries to continue on as normal. When it comes to offsetting the answer is more of a ‘yes, and…’ to be used in conjunction with other approaches.

In the meantime, if you are purchasing offsets, here are some things to consider:

  • Look for schemes that are independently verified to international standards, such as Verified Carbon Standard, Gold Standard, and Green-e Climate Standard
  • Good offsets should disclose what they’re funding and how they calculate emissions saved. For example, projects registered with bodies like Climate Action Reserve, which has protocols on quantifying savings
  • Look for offsets that create additional reductions rather than things that would have happened regardless of their contribution
  • Look for offsets investing in renewables, energy efficiency or green innovation rather than tree planting 
  • Alternatively: skip offsets all together and donate an equivalent amount of money to local grassroots organisations working to increase accessibility to clean transportation options, green energy projects, local regenerative projects, sequestration schemes or reforestation initiatives that aren’t tied to offsetting. By working on a more localised level you’ll be more likely to see the results and know where your money is going.