Carbon Offsets: angel or demon?
Nowadays, people are more aware of the impact they have on the environment and many are trying to change their lifestyles to become more eco-minded. Of course, there are many comforts and conveniences in our modern lives that we are loath to give up, including eating out, driving, and travelling abroad. So what can you do? Some companies have started offering something very specific and appealing to their environmentally-conscious customers to assuage their guilt and ensure their continued patronage. That is, of course, a carbon offset. People can pay a small fee which then supposedly is spent in support of environmentally-friendly projects like forest conservation, green energy research, etc. The idea is that you can cancel out your carbon footprint with a small sum.
Sounds great, doesn't it? Now we can enjoy nature-damaging activities while remaining unsullied, right? Well, not exactly. Just like with everything else, we cannot 100% trust anything large corporations in a capitalist world say. After all, their #1 concern has been, and always will be, making a profit at the expense of pretty much everything else. That doesn't mean that some companies don't genuinely care for the environment, and some do make an actual difference, but you should approach these carbon offsets with many grains of salt. Remember, if something sounds too good to be true, it often is.
You may be surprised to learn that the US government has been keen on curbing air pollution since at least the 1940s. It all started with the 1948 Donora smog fiasco, where, for three days, a mixture of hydrogen fluoride and sulphur dioxide were thrown into the air by the nearby American Steel & Wire plant owned by U.S. Steel's Donora Zinc Works. Smog was a common occurrence in the small Pennsylvanian town, but during those days the weather was against them and the smog accumulated and hung in the air to the point that 14,000 people became ill and at least 50 died. The town got a bad reputation for being dangerously unhealthy to live in and property values dropped significantly. As a result, the US government started looking into policies they could enact to help reduce the risk of similar tragedies occurring in the future.
In 1955 The Air Pollution Control Act was enacted, which provided funding for the US Public Health Service for training and research, but it did not directly control polluters and pollutants as of yet. The program was extended multiple times over the years while the government considered how far they could push anti-pollution policies. Finally, in 1963, the Clean Air Act was launched. The Act encouraged all levels of government to create and manage their own pollution standards and provided $95 million over three years in funding to do so. There have been countless additions and amendments to the Clean Air Act over the years, including ones to reduce the frequency of acid rains, regulating car, boat, and aeroplane emissions, and ozone layer protection.
By the late 80s, Americans were already used to hearing about air pollution, and in 1989, Applied Energy Services unveiled their new, coal-fired power plant in Connecticut. To mitigate some of the damage their new plant would undoubtedly cause, and to placate those who would sound the environmental alarm, they decided to offset some of the anticipated emissions by financing an agroforest in Guatemala. This is considered to be the first carbon offset project ever. It was estimated that the coal plant would produce 14.1 million metric tons of carbon over its 40-year lifespan, and that the forest the company had invested in would "sink" 15.5 to 16.3 million metric tons of carbon. It seemed like a pretty good deal. On top of that, the area where the forests are extremely poor, and the project also provided forestry education and training to people from local communities. However, an external evaluation was conducted in 1999 and found that the project had actually only offset about 270,000 tons of carbon (only 1.8% of their initial goal) between 1989 and 1999. In 1996, the World Resources Institute estimated that the amount of carbon sequestered in the first 5 years was around 11.5 million tons, but internal emails at the time reveal that the actual amount was unknown, citing missing data and inaccurate models. In the end, the project was a colossal failure due to lack of personnel, data collection, and notably, the reduction of the project area from 280,000 hectares to 121,000 hectares over the course of the first leg of the program. Of course, since this was the first time such a project had been undertaken there would be some inevitable teething problems. Surely, we learned from our mistakes and there must be better regulation now, right?
The Kyoto Protocol was signed by 192 countries in 1997. Developed nations were obliged to limit and reduce their greenhouse gas emissions. One way for countries to meet their targets, and not be penalized, was for them to offset what they produced by investing in green spaces and infrastructure elsewhere. In that same year, the Oregon legislature passed a bill requiring new power plants to limit their net carbon output to 17% below the most efficient combustion turbine plants located within the country. To this end, PacifiCorp Power Marketing, who was building a 500-megawatt power station, proposed a $4.3 million
carbon offset plan which included $3.1 million to fund offsite projects. One of their projects was to fund the installation of solar panels to 182,000 homes in India and Sri Lanka. The logic here is that in rural areas, people use kerosene lamps which are carbon heavy. Replace that with solar power and voila! Carbon offset. In the end, only 32 solar panel systems were installed and the project was cancelled in 2001. The failure of this project was largely due to too-strict eligibility criteria and the solar panels weren't free; those who received solar panels had to pay back the installation costs over 5 years. It might have worked out to be a good deal for them, but the prospect of having to pay back a loan probably drove a lot of people away. In the end, practically no carbon offset occurred from this particular scheme.
Two happy customers 🙃
The previous two cases are prime examples of how something that looks good on paper can fail due to poor planning, research and execution. It reminds me a lot of TOMS. Everyone wanted to buy their shoes because they thought they were really helping poor kids on other continents. And yeah, the kids appreciated the shoes, I'm sure, but they didn't really make much of an impact on their lives. But, at the time, TOMS were wildly popular because it made people FEEL GOOD to buy them. And that's the essence of carbon offsets, people feel good when they buy from companies that claim to be carbon-neutral and people feel good when they spend a couple of bucks to offset their own carbon footprint. The reality is many of these projects are lies. Let's look at some more modern examples:
The Australian Carbon Credit Scheme
Earlier this year, Prof Andre Macintosh, a environmental law and policy expert from The Australian National University blew the whistle on the government's scheme to buy carbon credits to reduce the country's emissions to hit their targets. He stated that the $4.5 billion "direct action" emissions reduction fund was severely lacking in credibility. Allegedly, projects for re-growing forests are particularly flawed. He and his colleagues reviewed 119 reforestation projects worth 17.5 carbon credits with 1 credit = 1 tonne of carbon absorbed. Most of the areas surveyed had not increased in size since the beginning of the project, and 59 had actually reduced in size. The team also found issues with landfill projects that were supposed to capture methane. They discovered that 2/3rds of the claimed reductions in emissions would have happened anyway, and were not "additional" cuts as required by policy to receive the carbon credits.
In a bid to get rich quick, George saw the profit in carbon offsets and in 2007, set sail on his boat called "Planktos" to the Galapagos Islands. His goal? To spread iron dust over 2.4 million acres of ocean in hopes of creating an enormous algae bloom. The bloom would act as a carbon sink, and George would sell the offsets for $5/ton. According to the Parametric Press, 1 acre of algae can remove up to 2.7 tons per day. I ain't going to do that math, but that spells a lot of money for George. Thankfully, there was a public outcry and Sea Shepherd even threatened to ram the Planktos. George gave up... but not too long after hatched a new plan of planting trees in Hungary and selling that. He presented certificates for the offsets to the Vatican on July 5, 2007, the photos of which going viral on the internet. It's assumed that more offsets were purchased, but George's company, also called Planktos, suddenly closed in December without ever planting a single tree. A lot of parties were affected by this: the Vatican, the country of Hungary, the village of Tiszakeszi, and all of the individual buyers who were swindled by George.
Cardinal Paul Poupard accepts a KlimFa carbon offset certificate from Russ George in July 2007.
The Guardian and Unearthed (the investigative arm of Greenpeace) investigated 10 forest projects that provide carbon offsets to 6 major airlines, including British Airways and easyJet. They found that there were inconsistencies in the methods and tools used to measure how much of the regions would become deforested in the future. Most of the projects used different algorithms to predict what would happen to the forests in the future, and it seemed like the data was skewed in the project managers' favour on more than one occasion by predicting that the forest would be completely wiped out in the near future without their intervention, which seems fishy. One project predicted that the deforestation would be triple the rate it was in its historically worst year. Another project, which was located in a national park and had not experienced any reduction in decades, was forecasted to experience huge deforestation without outside intervention. Obviously, these projects and their bogus models are producing the carbon credits they are claiming to, which means the offsets are, in the best cases, less than anticipated, and in the worst cases, totally useless. The CEO of Etihad Airways in 2021 said, “I think offsetting is cheating, it’s a short-term stop-gap if you haven’t got a more sustainable alternative, but it’s cheating.”
Why do companies and countries do this? Well, there are many factors contributing to these scams. In some cases, it might really be a lack of management, training and research. We might simply lack the proper knowledge at this point to accurately measure and predict carbon absorption with accuracy. But honestly, the real problem is what it always is: money. The value of the Global Carbon Market surged to $851 billion (USD) last year, and everyone wants a piece of that pie. Not only that, but those who are on the other end of the carbon market, and I mean the buyers, might also find it cheaper to buy credits than to pay fines for going over their emissions limits. Being a "green" company is also an excellent marketing tool for private companies who want to capture eco-conscious customers. You may feel like the victim right now, but the one who really pays is the environment. Instead of investing in actual sustainable and green technology, companies and countries spend money on carbon offsets, which, as we now know, probably aren't doing much good.
"offsets and sustainable aviation fuels, or SAFs, take away from progress toward truly transformational technology like hydrogen or electric-powered planes that will directly lower carbon emissions." - Jozsef Varadi, CEO of Wizz Air
"Carbon offsetting is truly a scammer’s dream scheme.
It’s a bookkeeping trick intended to obscure climate wrecking-emissions. It’s tree planting window dressing aimed at distracting from ecosystem destruction.
It is the next big thing in greenwashing — and we must not be fooled." - Chris Greenberg, Greenpeace
The result is that there is no significant reduction in global emissions despite over two decades of protocols, accords, and calls to action. And I know, I know, the world population has also increased blah blah blah, but based on my reading, I think these carbon offset scams play a big role. Activists and whistleblowers have caught on to the deceptions, but it seems like world-leaders are a little slow to the punch. Carbon offsets were a major talking point during the COP26 conference last year and speakers touting them were challenged by Greta Thunberg and Jennifer Morgan. We too, need to open our eyes and step up to companies and governments and push for real action, not just a Band-Aid. Look at this graph:
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