According to Wikipedia, “A carbon offset is a reduction in emissions of carbon dioxide or other greenhouse gases (GHG) made in order to compensate for emissions made elsewhere.”
While the statement is true, it is missing the most important component of a meaningful offset: Additionality.
True Additionality is the activity, or a project, that reduces emissions that would not have happened without an offset buyer, or collective buyers, in the market making the project happen. The thinking here is: why should credit be granted if greenhouse gas reductions would have happened anyway?
The carbon offsets market has suddenly been flooded with offsets from a variety of projects, such as forest preservation, regenerative agriculture, clean water, nature-based solutions, renewable energy and removal of GHGs. But many of these projects did not need financial backing to get going, or were already established. How is a company needing offsets to meet its annual carbon neutrality goals to know which offsets are additional – which ones will really make a difference?
The Integrity of an Offset
The integrity, or quality, of an offset refers to the level of confidence that the use of an offset will remove of GHGs. The key component to support confidence in carbon offsets, and their integrity, is the additionality.
There are several aspects of carbon offset projects that need to be carefully inspected and verified to prove that the projects are indeed additional before an organization makes any purchases. A recent Forbes article clearly lists these critical aspects:
- Financial Analysis: If a project had not previously received funding because it was felt that it would not be profitable, then it is considered ‘additional’ if monies are made available specifically so it can move forward and reduce emissions.
- Technological: Does the project lack the necessary access to planting materials, equipment or infrastructure for implementation of a technology? If so, the project could not be implemented, resulting in higher emissions. Financial or technological help that it couldn’t get otherwise would make it ‘additional.’
- Alternatives to the Project Scenario: The project must demonstrate a threat, particularly for land use, that the land would have been converted to alternate harmful use if not for the existence of the ‘additional’ project.
- Institutional Barriers: Lack of enforcement of land use regulation or changes to government policies or laws are often an impediment; changes to make a project a reality could be considered ‘additional’.
- Local Tradition: Traditional knowledge or lack thereof, laws and customs, market conditions, and practices that prevent a more carbon-efficient scenario from being implemented might require compromise but would allow a project to develop.
- Ecological: Degraded soil, catastrophic events or unfavorable meteorological events, and pressure from grazing signal significant obstacles to overcome; regenerative agriculture or special planning projects could provide a new way to decreasing carbon.
- Social: Increased pressure on land due to population growth, social conflict, widespread illegal activities, land tenure, property rights, absence of defined property rights are barriers to reducing GHGs. Seeking solutions so all parties agree can provide opportunities for new carbon capture projects.
Also included in the Forbes article are Guidelines for the careful determination of additionality:
- A Quality Offset Credit: A quality offset credit “Must represent at least one metric tonne of additional, permanent, and otherwise unclaimed CO2 emission reductions or removals;” it cannot be overestimated, and it should not come from “activities that significantly contribute to social or environmental harms to communities or biodiversity.”
- Legal: An ‘additional’ project is one that is not already legally required to do what it is doing.
- Common Practice: The same project activity is not common practice in the area and is being funded through other mechanisms, or that prevailing practice or existing regulatory and policy requirements result in the implementation of a technology with higher emissions.
- Stakeholder Inclusion: The project should include views and inputs of stakeholders throughout the project process.
The term ‘greenwashing’ initially meant that some carbon offsets were not from verified sources, but has recently begun to include offsets that are indeed measured and verified, but have not come from truly ‘Additional’ projects.
Unfortunately, many carbon offset projects are based on preservation. While these projects can reduce GHGs, they are often temporary versus the much-needed permanent project. An example is a forest that has been planted with future cutting in mind. Trees take, on average, 24 years to begin reducing carbon at a meaningful level, but the trees in this example will be cut after 20 years. They have not helped reduce emissions in the needed way.
Another example is paying someone not to cut the trees on their property one year, knowing full well that they will be cut the next. The carbon offsets from these two examples sell for a low price on the market, so they have typically been attractive to companies that want to say they’re offsetting their emissions, when in actuality, these are not having the impact that is so crucially needed.
In general, the higher the cost for an offset, the better quality the project, and the more GHGs are being removed from the atmosphere. Higher quality and cost offsets will also provide a higher ROI than the lower cost, ineffective offsets.
Soli’s position is, and always has been, that it will provide its clients only with carbon offsets that have not just been measured, audited and verified, but that are also from truly additional offset projects. If we are to meet the Paris Accord goals, and stop the increase in the planet’s temperature, then we must find ways that actually remove carbon from the atmosphere, or avoid being emitted at all. This must be in addition to all the efforts that were in place before the Paris Accord.
In summary, in order to be a truly useful tool in fighting climate change, carbon credits must be permanent, measurable, unique, verifiable, real and additional. We can’t solve the entire climate crisis with offsets, but those that have true additionality can make a big difference.
“Carbon offsetting is essential to tackling climate change. If the world is to achieve net-zero emissions, then offsets are part of the plan”
– The Economist, May 2020