Are Carbon Offsets Really the Answer?
Carbon offsets have been growing in popularity in recent years as more people and businesses are learning about the carbon footprint of their lifestyles and products. Some suggest, however, that carbon credits (credits and offsets are interchangeable terms) are just hype and do not represent a meaningful step in the right direction.
What is a carbon offset?
Most products and the energy you use have associated emissions. The collection of the goods and services you consume is known as your carbon footprint. Associated emissions from a product, for example, might be the energy consumed to mine the natural resources used as inputs, manufacture the product itself, or the emissions associated with shipping the product. A carbon offset is a financial instrument that may be purchased to counteract those carbon emissions. If 100% of emissions were offset, you’ve reached “net-zero” emissions.
There are different types of carbon offsets, ranging from tree planting and other environmental conservation projects to investing in technologies and infrastructure. The project itself determines the cost and can range greatly between $0.10 per tonne to $44.80 per tonne.
How big are the carbon offset markets?
First, there is an important distinction between voluntary carbon markets and those purchased for compliance. An example of a voluntary carbon offset might be an incremental opt-in charge that a traveler might incur to offset the emissions associated with flying on a plane. An example of an involuntary carbon offset might be a government-mandated offset required of companies operating within carbon-intensive industries.
The global voluntary carbon market size was estimated at just $300 million in 2018. Voluntary carbon credits are estimated to reach $30 billion by 2030 and potentially as much as $200 billion billion by 2050. By contrast, the global carbon compliance offset market is generally much larger.
This article focuses on the voluntary market as it is personally actionable. The average American emits 16 tonnes of carbon annually.
How effective are carbon offset markets?
Carbon markets are starting to grow significantly in popularity. However, for many scientists, researchers, and independent industry experts, carbon offsets are not attempting to solve the problem of reducing our combined carbon footprint. Instead, they are being used to greenwash business-as-usual practices by many companies.
For example, a number of global oil & gas companies have emerged with net zero emissions targets, but these pledges, even if they are upheld, never require them to actually reduce emissions. In all cases, businesses will likely try to cancel out emissions by participating in the carbon markets and hiding behind some murky math.
While I would never argue against reforestation, providing a golden parachute to businesses and individuals to maintain their status quo is counterproductive and a distraction. In order to have a meaningful chance of meeting the goals laid out by the IPCC, we need to focus on reducing emissions in the short term... aka “real-zero” instead of “net-zero”.
Should you purchase carbon offsets?
The decision to purchase carbon offsets is a personal one. While offsets should never be considered a substitution for emissions reduction, they do serve an important role.
If you do decide to purchase offsets, there are several marketplaces that are trustworthy to ensure the projects you’re supporting offer “additionality”. Controlling your own portfolio of offsets is a good way to ensure the money you’re allocating is being used in the most effective way possible. It is estimated that up to 60% of credits available are from questionable projects that provide no carbon benefit for the planet, so make sure you’re using a trusted marketplace.
Supporting advanced technology such as direct air capture (DAC) is a great use of offset capital because these types of high-risk technologies and projects might not be funded otherwise, but have the potential to provide significant progress to reduce global warming. The cost per tonne avoided is often higher for these types of projects. In this case, quality matters more than quantity.
Trusted carbon offset marketplaces
All offsets aren’t equal. Below are three marketplaces recommended because of their integrity and goal to maximize benefit to the planet. Stay tuned for our detailed guide and review of available carbon offsets.
- Nori enables removal of existing CO2 in the atmosphere by using a peer-reviewed, transparent platform that pays farmers to use agricultural methods that sequester more carbon in their soils.
- Stand For Trees uses the UN-approved REDD+ model to preserve tropical forests around the world and ensures all offsets are 100% additive so that credits are never resold.
- Wren uses a subscription service to provide steady funding for community tree planting, clean cooking fuel for refugees, rainforest conservation and agroforestry.
Alternatives to buying carbon offsets
Atmos offers an online savings account that uses 100% of your FDIC-insured deposit balance to fund clean energy and other climate-positive projects. Atmos seeks to pay you better-than-market rates on your deposits to actively reduce emissions. Adding an account to your existing bank is almost as easy as doing nothing at all. Join Atmos now.