In the debate about how to best address the climate emergency, there is a tendency to make the perfect the enemy of the good.
In a piece published by Climate Home News last month, Yeb Saño dismisses carbon offsetting as a “false solution” and the idea it can benefit the global south as “greenwashing at its most patronising”.
While he raises important points about variance in quality, to summarily reject a climate solution that allows companies to voluntarily finance decarbonisation beyond their boundaries because it can be misused is akin to arguing against public transport because it sometimes breaks down.
The truth is that the details matter here – both in the credits themselves and how they’re used and claimed by companies.
Carbon offsetting is one way to take responsibility for carbon emissions by compensating for them with the purchase of carbon credits representing the reduction or removal of emissions elsewhere. Yet it only works as a climate mitigation solution if a key premise and few critical principles are in place.
The most important principle is that there is a lower level of emissions in the atmosphere than there would have been in the absence of the act of offsetting.
This fundamental principle is underpinned by three key attributes:
- Additionality – You can’t compensate for a problem with a solution that was already happening. If the reduction or removal was already occurring or going to occur, it is not offsetting. This has been perhaps the most critical challenge of carbon markets. It is also one that is not sufficiently scrutinised in the various initiatives emerging, like the Task Force for Scaling the Voluntary Carbon Market.
- Permanence and leakage – You can’t compensate for a problem with a solution that is going to be reversed later that causes an increase in emissions elsewhere. This is especially challenging with removals associated with forests and agriculture, despite the urgent need for finance in those areas.
- Unique claims – You can’t compensate for a problem with a solution that any other entity also has the right to claim, as you cannot control what they do with that benefit. Governments could, for example, opt to lower a policy ambition.
Equally crucial, the ability to offset should not de-prioritise reducing your own emissions. Company targets can and must be set to non-arbitrary, science-based abatement pathways.
Saño is rightly concerned that carbon offsetting projects do not become a form of climate colonialism, which indeed could be a risk with any form of international climate finance.
He focuses on issues associated primarily with forestry-related projects and their risks toward local communities. This is why Gold Standard requires strict safeguards, including respecting land tenure rights and prohibiting the displacement of peoples.
Every Gold Standard project must also actively engage local stakeholders and remediate any concerns they have before the project can move forward. And beyond a simple “do no harm” requirement, each project must deliver verified contributions to a minimum of three sustainable development goals for the local communities and ecosystems.
Organizations like VNV Advisory have experience working directly with these communities in the global south to develop high-impact climate protection projects.
In a discussion about Sańo’s editorial, VNV Director Sandeep Roy Choudhury acknowledged that there is “jostling for space, particularly in nature based approaches”. For this reason, he underscored that safeguarding, direct community benefits, and transparency about financial flows are the solution.
For example, in a VNV project in Uttarakhand, India, communities benefit from reforestation activities. Local women, who are otherwise excluded from the financial system, are paid to source seeds for planting, and to store, plant, and nurture them. They are also provided with other socio-economic incentives such a seed fund for micro lending within women-led community groups – all from the carbon sales and with their full knowledge and prior consent.
Choudhury adds: “Carbon credit revenue is becoming a massive source of finance for the global south, which is not forthcoming from government or other sources of private sector investment.”
To help carbon credit buyers know what quality means in practice, the new Carbon Credit Quality Initiative will rate credits in the market on these safeguarding principles, environmental integrity, and more.
Finally, it’s worth considering the alternative of less-than-properly-ambitious climate action, which is doing nothing. Unfortunately, this is too often the case. Any voluntary action has the potential to be useful, but is no substitute for regulation.
As a climate community, we can do more than just say what not to do. We can improve the instruments we have, including carbon credits. We can set expectations for science-based target setting. We can innovate in ways for companies to invest in beyond-value chain climate action, generating new, additional, robust, independently verified climate action and conservation.
Owen Hewlett is chief technical officer at Gold Standard.