The market for carbon offsetting is set to expand considerably, with the first carbon offset futures contracts to launch very shortly (Reuters.com - INSIGHT-Carbon offsets gird for lift-off as big money gets close to nature). You may be wondering what carbon offsetting is, which can be described as:
“A scheme which allows individuals and companies to invest in environmental projects around the world in order to balance out their own carbon footprints.”
These ‘projects’, in conjunction with reducing carbon emissions directly, are mechanisms by which net zero transitions can be achieved. This market would be like a credit instrument, where the buyer promises to reduce emissions via such offsetting projects (without directly investing in any projects at that time). Examples of projects include combating deforestation, investing into renewable energy projects and supplying fuel efficient household alternatives.
One project in particular supplies fuel efficient stoves for women in North Darfur, Sudan, which replaces 3 stone fires with an EzyStove and has reduced approximately 20,000 tonnes of CO2 emissions to date (Carbonfootprint.com - DARFUR COOKSTOVE). To put that figure into perspective, the average approximate carbon footprint per person per year in the UK is 12.7 tonnes of CO2 emissions (Pawprint.eco - What is the average carbon footprint per person in the UK?).
A valid argument against carbon offsetting is that it distracts people from the real issue at hand – directly reducing carbon emissions currently being released into the atmosphere. In an attempt to reach net zero targets, offsetting could be a route that companies take to avoid completely reassessing their operating models in line with these sustainability targets.
As echoed by Greenpeace (Greenpeace.org.uk - The biggest problem with carbon offsetting is that it doesn’t really work), even though these offsetting projects are not inherently bad initiatives to be investing in, they shouldn't be used as 'PR plans' that prevent companies from taking meaningful action on their carbon emissions.
There is a fear that the proliferation of the carbon offsetting market via futures contracts will exacerbate this behaviour and give companies a greater 'licence to emit'.
What can we do?
The answer is simple. Be the change you want to see. As individuals – let's ‘put our money where our mouth’ is by channelling our spending power into sustainably sourced products (as one example). As companies – reassess the way you do business in order to introduce and reinforce sustainable practices.
If you’d like to discuss any of the points raised in more detail, please don’t hesitate to contact me.