Do "Quality" Carbon Offsets Exist?

Everybody wants to reduce their carbon footprint these days. But many companies have looked to the quick fix of buying carbon offsets. While this practice may slow down as the recession continues, the debate will continue to rage about what makes a quality offset, and there's the rub.

Ideally, you want something that is measurable and legitimately reduces the amount of carbon going into the atmosphere (especially during tough times -- why spend money on something that may not accomplish what you hoped?). A number of problems crop up, though, particularly "additionality," which boils down to whether that project -- saving some land, building a wind farm, capturing methane from a pig farm, and so on -- would have happened anyway. You don't want to pay people for things they're already doing.

A group of NGOs has recently formed the Offset Quality Initiative to tackle this thorny question - that answer is still in the works. Environmental Defense Fund (EDF) went a step further and just launched a new resource for companies or individuals looking for high quality projects to invest in today. Their Carbon Offset Project List is fascinating. They've selected only 12 projects, far less than other respectable lists, such as the "Gold Standard Registry," backed by the World Wildlife Fund and the UNDP, which lists 200 projects around the world. So EDF must have narrower criteria.

So what's really interesting is what projects they do have. Except for one project, all are focused on methane capture, and 10 of the 12 are landfill projects (the lone holdout is a truck stop electrification project so truckers don't have to idle - very cool). Many common options are not on the list - wind, solar, retrofit projects (basically changing lightbulbs), planting trees, and so on.

I asked EDF why the methane obsession. In short, they were a) looking at the longest-standing projects with solid track records and and b) focusing on measurable and verifiable proof of reductions. They felt that "grid-connected" projects such as wind power represented a different category of renewable projects, not offsets exactly.

All of this debate demonstrates how hard it is to really define an offset...which makes claiming credit for it and declaring yourself "carbon-neutral" very dicey. Reducing carbon to "zero" is the ultimate goal here, but there are no shortcuts.

Companies can tackle this problem with a basic hierarchy of priorities. Much like the "reduce, reuse, recycle" mantra for waste, we need a simple plan for addressing carbon in business. First, cut emissions directly through efficiency and smart redesign of processes and products (and this will reduce costs directly, a good thing in tight times). Second, buy renewable directly for your facilities, including solar, wind, geothermal and, yes, local landfill gas - whatever works in your region and climate. Then, as a last resort, look for quality offsets.

Some companies are following this prescription already. Dell recently announced that it hit its carbon-neutrality target (for its offices and employee travel). The company reduced emissions, bought direct renewable energy for its headquarters from a Waste Management landfill project, then made some investments in renewables elsewhere to offset the rest.

I'm searching for a catchy three-word slogan for this path. How about Eliminate energy waste, generate your own Electrons from renewables, and Equalize your emissions with offsets? Or Bring down energy use, Build your own, Buy offsets? (Clearly, it's not easy to come up with a Tom Friedman-esque shorthand for something...send me ideas...)

In the meantime, at least the information on what makes for a quality offset is getting better. Very smart people are exploring the problem, which will only get more acute as more carbon markets spring into being. When there's a price on a reduction, you can bet someone will want to define it. Nonetheless, start now by bringing your own emissions down and building your own renewables; these are cleaner options.

Because not creating carbon to begin with is the highest quality "offset" around.

This post first appeared at Harvard Business Online.

Andrew Winston helps companies use environmental thinking to grow and prosper. He is co-author of the best-seller Green to Gold, writes a monthly e-letter Eco-Advantage Strategies, and regularly blogs on green business.

Follow Andrew Winston on Twitter: www.twitter.com/GreenAdvantage

Comments

[LaurenG]

Thanks for this great post, Andrew! Here is what my colleague at Environmental Defense Fund has to say about it:

"Thanks for blogging about carbon offsets and our new offset purchasing guide, CarbonOffs­etList.org­.

You note that a lot of our projects are similar to each other, and I wanted to add more insight on why that’s so right now. The composition of our list should not be taken to indicate any preference for specific project types - in fact, we always prefer to be technology-neutral and let the market decide what project types are most worthwhile. We evaluated the projects that were submitted to us (along with substantial documentation) and included every one that met our standards.

You also point out that we treat most “grid-connected” renewable projects, such as wind projects, as different from offsets. Typically, these projects don’t offer measurable and verifiable proof and that’s why we were not able to include them on our list. It’s just common sense that an offset should come with proof of a reduction, otherwise it’s unclear what is being bought or sold.

However, even though we don’t consider them offset projects, we are highly supportive of adding more and more grid-connected renewable energy projects. A widely available tool called renewable energy certificates (RECs) allows folks to support these grid-connected renewable projects. We just don’t want people to mistake them for verified offsets.

Cheers,

Ron Luhur
Carbon Markets Specialist,
Environmental Defense Fund

[KarbonKenny]

The answer is yes, quality carbon offsets do really exist. See them here:

http://www.freecarbonoffsets.com

[KillTheMessenger]

:-)

Works for me. And saves money that I can reinvest in real energy efficiency in my home.

[KillTheMessenger]

Carbon offsets are the modern equivalent of Tom Sawyer taking Apples for letting other kids paint his fence.

If you want to plant trees, plant trees, for heavens sake. But don't feel good about all the carbon that you just saved. You didn't. The place where they plant those trees used to be lush forest before someone cut it down centuries ago or just yesterday.

And if you want methane to be captured, don't pay someone who has a methane source to pollute less. Get your politicians to force the polluter to fix it on their own cost. That's how that works.

If you want to save carbon, you have to do it the old fashioned way: use less energy.

[GoBlueHoo]

Congratulations to organizations like EDF that are bringing more transparency to the market. A couple thoughts:

1.) For the most part, methane dominates the North American carbon offset landscape since it has roughly 21x the global warming impact than CO2 (ie, 1 tonne of CH4 equals roughly 21 tonnes of CO2 equivalents). That means projects create more credits, which means the project is able to sell more and make more money, which means that the project may financially depend on the carbon credit sales to go forward, which means that it may indeed be financially "additional" (above and beyond business as usual).

2.) One can use standards or protocols as a proxy for vetting the quality of offsets. For example, aside from Clean Development, one can look to Gold Standard, California Climate Action Registry, and Voluntary Carbon Standard projects for high quality offsets. There are limited numbers of these projects in the United States and Canada, but that will soon change.

Justin Felt
www.pointcarbon.com

[CarbonOffsetREVIEW]

...and if you are looking for hundreds more of carbon offset providers, check out www.carbonoffsetreview.com. The site gives the consumer a chance to post comments (good or bad) about providers and projects.