The trendy concept fails to tackle the root causes of climate change, says Ella Yarrow, Sustainability Manager, Zedify.
As the climate crisis intensifies, the concept of carbon offsetting has emerged as a seemingly convenient solution for businesses (and individuals) looking to bolster their sustainability efforts.
At its core, carbon offsetting involves compensating for our carbon emissions by investing in environmental projects that supposedly reduce or absorb an equivalent amount of CO2. But while this might sound like an effective strategy, it is actually fraught with limitations that can be damaging to true long term sustainability. Here’s why.
It addresses the symptoms, not the cause
The biggest challenge with carbon offsetting is that it fails to address the root causes of climate change. Instead of reducing their own emissions, companies can purchase offsets and continue their business-as-usual practices; this approach creates a dangerous illusion of progress, distracting from the urgent need for systemic changes. As an example of the magnitude of change required, the Net Zero Standard from the SBTi suggests that companies should be cutting their emissions by more than 90 percent by 2050 before turning attention to permanent carbon removal and storage.
And so as noted by the Smith School of Enterprise and the Environment at Oxford, relying on our current approaches will never achieve the level of emissions reductions necessary to meet global climate goals.
Social injustice
Given many offset projects are located in developing countries, they can exacerbate existing inequalities and perpetuate a form of climate injustice.
As Souparna Lahiri, a climate adviser for the Global Forest Coalition, explains: “The carbon market and the rich west, for the last 25 years has actually done nothing to mitigate the climate crisis, rather, protected their high-emitting industry, production, consumption and lifestyle. It’s a story of continuing and widening inequality and climate injustice.”
This is especially true when you consider that the 3.5 billion people living in poverty only contribute 10 percent of global CO2 emissions, according to Oxfam, yet they are the most affected by the climate crisis.
Reports of human rights abuses, such as the sexual harassment of female employees in offset projects, underscore the lack of adequate oversight and due diligence by companies purchasing these offsets. And many of these projects positioned as economical carbon reduction strategies also fail to take into account the alternative benefits of the landscape in which they operate, such as aesthetic beauty, wildlife habitats, or any possible spiritual or religious significance, thereby negatively impacting and devaluing the very people that live and work there.
Questionable environmental benefits
The environmental efficacy of many carbon offset projects is highly questionable. An investigation by the Guardian and Corporate Accountability into the legitimacy of the top 50 most popular offset projects found that 78 percent of them offer no real atmospheric benefits because some of their characteristics undermine their proposed emission cuts.
Another study, focussing on forestry projects by the University of Berkeley, found that almost 300 carbon offset projects have consistently allowed developers to claim far more climate-saving benefits than justified.
The stats are alarming, and these examples are just a snapshot into the many other investigations into the legitimacy of projects, showing just what a complex landscape carbon offsetting is to navigate, understand and trust.
Transparency and verification challenges
The voluntary carbon market, where these offsets are traded, is largely unregulated, leading to widespread concerns about the accuracy and transparency of reported climate benefits and the potential for fraud.
Although international standards and certification bodies exist, such as the American Carbon Registry (ACR), Climate Action Reserve (CAR), Verra (Verified Carbon Standard) and the Switzerland-based Gold Standard, their methodologies and the consistency of their applications remain contentious, making it very difficult to know who and what sources to trust.
Potential unintended consequences
Reliance on carbon offsetting risks fostering a public perception that climate responsibility can be outsourced, thereby undermining the urgency for direct action.
The market for carbon offsets also shrank dramatically last year, falling from $1.9bn (£1.5bn) in 2022 to $723m in 2023, according to Marketplace Ecosystem, because of the fears of verification and transparency and a growing distrust among consumers and stakeholders regarding their effectiveness and transparency.
This distrust can erode public support for broader climate initiatives, making it harder to achieve the collective action needed to address the climate crisis effectively.
A better way forward
While carbon offsetting may offer some short-term benefits, it is not a sustainable long-term solution to the climate crisis. By allowing companies to continue their polluting practices under the guise of environmental responsibility, offsets distract from the critical need for change. It’s why more than 80 nonprofits have in the last month issued a joint statement opposing the use of carbon credits, arguing that permitting companies and countries to meet climate commitments through carbon credits is likely to hinder global emission reduction efforts.
In terms of long-term sustainability, carbon offsetting pales in comparison to direct emission reduction strategies. Direct reductions involve tangible actions to lower emissions at the source, such as transitioning to renewable energy and improving energy efficiency. We are also seeing a movement towards carbon “insetting”, which focuses on companies doing more good (rather than less bad) within their value chain.
A more sustainable future
And so we must prioritise direct emission reduction strategies and adopt more holistic approaches that address the root causes of climate change, promote social justice, and ensure genuine environmental benefits.
Only through such comprehensive efforts can we hope to mitigate the impacts of climate change and build a more sustainable future for all of us.
