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Carbon offsetting: Can it help solve climate change?

Carbon offsetting has been billed as a key tool in the fight against climate change - but what actually is it - and does it work?

Power plant with smoke coming out of chimneys.

Carbon offsetting credits can be purchased by individuals and businesses. (Image: Pixabay)

In the race to tackle the climate crisis, limiting global heating to 1.5C may not be possible without removing carbon dioxide from the atmosphere – a process known as “carbon offsetting”. 

This is the conclusion think tank the Energy Transitions Commission came to in a recent report, saying that switching to renewable energy alone won’t be enough to tackle the problem. 

Carbon offsetting can be achieved through a variety of methods, including natural interventions such as tree-planting.

Industrial CO2 removal, though still underdeveloped as a technology, is another way the greenhouse gas can be removed from the atmosphere. 

Carbon offsetting has been mired in controversy due to evidence that some schemes have been ineffective, but others say that, done well, it could be a key player in the fight against climate change.

So what actually is carbon offsetting, how does it work, and is it actually effective? Here’s everything you need to know.

What is carbon offsetting?

When fossil fuels are burned, greenhouse gases are released into the atmosphere, building up and creating the warming effect we term “climate change”

Carbon offsetting offers a way to neutralise the emissions impact of activities that produce greenhouse gases through investing in projects that either remove CO2 from the atmosphere directly or prevent future emissions from occurring. 

It’s used by businesses and individuals alike to reduce the environmental impact of their activities by purchasing or contributing towards carbon offsetting projects.

People who purchase flights, for instance, might now find an option to pay additional costs towards offsetting the emissions caused by taking the flight. 

Projects can include anything from providing more emissions-efficient cooking stoves to women in developing countries to planting forests which remove carbon dioxide from the atmosphere. 

And although termed “carbon” offsetting, some projects may actually reduce methane – another greenhouse gas – rather than CO2. Methane is a particularly potent greenhouse gas which is produced by cattle and when waste breaks down. 

How much does it cost?

Carbon offsetting costs vary significantly depending on the size of the emissions being offset.

One way you could figure out the costs of offsetting an activity is to figure out how much greenhouse gas it produced in the first place. 

Individuals can work out the carbon emissions produced by a specific activity using a Carbon Footprint Calculator. This will also help quantify the cost of offsetting these carbon emissions.

According to Energy Sage, the average price of a carbon offset can range anywhere from £0.07 per tonne to £32.00 per tonne depending on the size of the company and the type of offset project. 

In order to balance the cost of tourism, which makes up 8 per cent of global greenhouse gas emissions, individuals can pay an offset company to reduce the emissions elsewhere in the world.

The airline Easyjet offers a carbon offsetting service that allows passengers to pay to plant up to 12 trees per months to compensate for their travel. 

Some companies also include carbon offsetting in the overall price of some products. To maintain their carbon neutral status, Jaguar Land Rover invest money from every purchase in carbon offset projects including clean and safe water projects in Kenya and Uganda and clean cook stove programmes in India and Ghana.

By purchasing carbon credits, a company can emit a certain amount of carbon dioxide in exchange for investment into environmental projects. 

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How effective is carbon offsetting?

Proponents of carbon offsetting say that, if done well, the mechanism can be an effective way to reduce the environmental impact of certain high-carbon activities such as flying.

Carbon offsetting has proved highly controversial for several reasons, however.

Environmental campaigner and writer George Monbiot famously compared carbon offsetting to the Catholic Church’s former practice of selling “indulgences” to people wishing to cleanse themselves of sin, saying that carbon offsetting incentivises companies to continue polluting rather than reduce emissions in the first place. 

A number of carbon offsetting projects have been revealed as flawed or defunct entirely, with experts warning in 2021 that the carbon offsets used by major airlines are based on a flawed system.

Environmental and climate campaigners have also pointed out that forests can take decades to mature and begin sucking carbon dioxide out of the atmosphere, meaning that the benefits won’t be realised until long after the initial emissions being “offset” have been released. 

Some experts say that it’s difficult to measure the effectiveness of carbon offsetting projects based on preventing future emissions, given they are predicated on hypothetical scenarios

For example, in the case of an offsetting project which distributed more efficient cooking stoves to women in developing countries, the “offset” is based on the idea that these stoves will save on emissions which would have been created by the former, polluting stoves.

If the offset never happened, the women may well have received more efficient stoves by other means, such as from a local authority or charity.

This means it’s hard to prove whether or not the savings made by the offset are additional to savings that might have been made by other means.

Because of this difficulty, many offset providers now “guarantee” their emission savings, meaning that if they turn out to be non-additional, the provider will recoup the losses with another project.

Carbon offsetting can also risk compromising the rights of indigenous people and others in developing countries, where projects are cheaper for western countries to purchase. 

Land might be cleared for creating forests, for example, displacing people from their homes. 

In spite of all these issues, there are some co-benefits to carbon offsetting projects, such as saving money for poor families previously dependent on fossil fuels for household energy.

And many environmental and climate groups and campaigners say that carbon offsetting has a place in the fight against climate change – though it should not be used as a substitute for driving down emissions as far as possible in the first instance.

Mike Childs, head of science, policy and research at Friends of the Earth, said: “The reality is that we – government, businesses and individuals – need to cut our emissions by as much as we can, as fast as we can. We also need to invest in projects that will remove carbon emissions from the atmosphere. It’s not either/or, it’s both.”

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