Carbon offsetting – the corporates love it.

smiling-businessman.jpg

Carbon offsetting has become one of the new corporate greening trends. Companies from Dell through to M&S are using this as part of their corporate responsibility agenda. Various organisations exist to operate this policy of carbon offsetting on the company’s behalf; e.g. carbonfootprint.com.

A number of groups have and still are researching and advising on this policy initiative. One such organisation based in Woking, UK is The Climate Group, headed up by Doctor Steve Howard who has a very impressive CV. The following is quoted from their website;

Why does offsetting help?
Since the projects which generate the carbon offsets reduce GHG emissions would not occur without the investment provided by the sale of the credits, all the emission reductions are new and additional to what would have happened otherwise. This means that use of voluntary offsets lead to lower global levels of GHGs and so help prevent dangerous climate change. Beyond this, investments in emission projects help spread the use and understanding of low carbon technologies and other climate change solutions as well as bringing a range of other economic, social and environmental benefits.

Is offsetting as good as reducing one’s own emissions?
Offsetting should not be seen as a long-term alternative to reducing emissions at source through (for example) buying green electricity and locally produced goods, reducing motorized travel and use of energy efficient appliances. However, many of these options are simply not practical or too expensive on the short-term, so compensating unavoidable emissions through offsets is a good way to reduce global emissions and individual or organisation’s carbon footprint until other low carbon solutions become more accessible. The ideal strategy will involve a mix of both emissions reductions at source and use of offsets.

More FAQ on offsetting from The Climate Group here.

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23 Responses to Carbon offsetting – the corporates love it.

  1. earthpal says:

    I love the pic of the cheesy corporate guy there. Lol.

    While I don’t doubt there are benefits to carbon-offsetting, I think they’re limited and there’s no denying that it will mislead people into a clear conscience about their polluting behaviour and mistakenly negate their need to reduce their excessive consumption. What’s important I think, is that carbon-offsetting is used in conjunction with an enforced carbon allowance scheme.

    I did read somewhere recently that some offset companies are simply buying up existing forests. How futile and dishonest is that? Where’s the reduction coming from?

  2. matt says:

    Love ya links earthpal 🙂

    I agree with the writer’s emphasis on energy system’s change and highlighting the fluffiness of such carbon offsetting schemes. I mean really, those organisations that arrange offsetting must be laughing all the way to the bank, with the fees they’re charging big corporates to offload their collective consciences and wrap up their corporate responsibility policies in mirrors!!

  3. earthpal says:

    Yes, no matter how grave a situation is, there will always be people who will find a way to exploit it to make money.

  4. matt says:

    God that guy in the photo is just soooo cheesy isn’t he! Looks like he is going to leap out of the screen, do a little song & dance about New York and then sell me insurance. Arh!

  5. earthpal says:

    Lol.

    Have you seen this BBC report? It seems that our government has cottoned on to the fact that not all carbon-offset schemes will maintain ethical practises and will implement a Standards procedure. It’s a small gesture but a good start.
    http://news.bbc.co.uk/1/hi/business/6273061.stm

  6. matt says:

    Yes I did hear something briefly. The following quote from your article is the part I don’t like;

    > ‘UK charity Pure for example does not run any projects itself, but invests donor money into certified credits.’

    I mean, what the hell does that translate too, carbon trading?

    I have confidence in David Miliband as Environment Secretary though and he seems to have Blairs backing. Lets hope he has Browns. David’s blog;

    http://www.davidmiliband.defra.gov.uk/blogs/ministerial_blog/default.aspx

  7. Pete Smith says:

    There was an excellent report on the failings of carbon offset schemes on the BBC’s ‘Inside Out’ strand last Friday (12/01/07).

    http://www.bbc.co.uk/london/content/articles/2006/12/29/insideout_100107_feature.shtml

    The Co-operative Bank, along with a growing number of financial services companies, is seeking to attract customers by giving its products green credentials. If you take out a mortgage with the Co-op, they pay a proportion of your mortgage into a carbon offsetting scheme in Uganda.
    The problem is that the Co-op doesn’t manage the scheme directly but farms it out to the Uganda government, who employ local labour for tree planting. The Co-op’s publicity claims full-time employment for 1500, whereas the work is seasonal for a maximum of 500. The locals are not only paid a pittance, they are increasingly being excluded from the forests which they have always used as a source of wood, food and water.
    So everyone’s been screwed.

  8. matt says:

    Think this was the sort of thing David Miliband was talking about this week. That the claims of offsetting schemes need to be clear & true. Surprises me a little I guess that the Co-op appear to have failed with the scheme you have pointed out. I can see though that they would want to let Uganda run the scheme rather than meddle. However, sensible conditions attached to the money are obviously needed and someone should be annually checking such schemes. Time to start up a little company I think Pete, flying around the world checking schemes on behalf of corporates … with offsets of course. 😉

  9. Pete Smith says:

    Schemes like the Co-op’s have no purpose except to ease the consciences of polluters and let them off the hook. It’s a bit like the confessional; be as bad as you like and one easy act of contrition purges your sin. The only reason trees are being planted in places like Uganda rather than in the UK is because it’s cheaper.
    There are schemes that can really make a difference. Lastminute.com is a partner with Climate Care in a project to install 3000 energy efficient kitchen stoves in Nicaragua.

    http://www.lastminute.com/site/travel/climatewise/nicaragua.html

    Each stove is predicted to reduce CO2 emissions by over 1.5 tonnes per year, reduces wood use by 60% and reduces health problems through improved air quality.
    That’s what I call win/win.

  10. matt says:

    Lastminute.com gets my vote. Very impressive scheme.

  11. earthpal says:

    Yes, the offset schemes that provide direct enviro-help to poor communities and ones that support renewables research are the ones that should be encouraged.

    But I would like to see Watchdogs in place to make sure these companies are doing all that they say they are doing.

  12. matt says:

    Like … Offset. :))

  13. Phil says:

    Don’t poo poo new Government standards or its relationship with carbon trading.

    Buying a UN Clean Development Mechanism (CER) certificate creates an investment that helps a developing nation to leapfrog into new cleaner technologies. It is supporting a real and verified emisions reduction. Then cancelling it reduces the emissions cap in Europe forcing a European polluter to cut emissions too. It is a double win-win. That’s why the Government is backing this approach – with projects is approved by the United Nations – and not unregulated stuff.

  14. matt says:

    Yup, the CDM is a good thing. Have no problem with that. But it is one instrument only. The scrutiny of offsetting schemes is needed to make sure the consumers’ money is going into worthwhile schemes like CDM. As Pete pointed out in an earlier comment Co-op’s Uganda tree scheme doesn’t sound like one of them.

  15. Phil says:

    Exactly. That’s why CDM is THE basis of the new Government Rules.

    Schemes that support unregulated tree planting or unregulated projects don’t meet the standard. But ensure you know which is which.

    Earlier in this thread, Matt questioned PURE the Clean Planet Trust. However, supporting the CDM is exactly what they do and with guarantees about low expenses (nil, as their costs are covered by Gift Aid). Let’s get behind them and the other three that are compliant with the new standards and let those that don’t meet the standards wither.

  16. matt says:

    OK I’ll check PURE out a little more closely.

    Do you work within the offsetting business Phil?

  17. matt says:

    From the PURE website;

    ‘This is achieved by either taking carbon permits/credits out of circulation, so that companies have to reduce their emissions, or investing in UN approved projects that reduce carbon emissions.’

    OK, I now follow PURE’s approach with regards buying up carbon permits. However, it will take a lot of buying surely to influence market price upwards in order to make carbon credits more expensive to buy and therefore making it more expensive for businesses to pollute. I would have thought it more prudent for PURE to largely follow their second area of direct investment in UN approved carbon reduction projects. Certainly easier for PURE’s potential customers to understand.

  18. Phil says:

    I look after some fund raising activity for PURE, but I am trying to contribute to this thread as fairly and as impartially as I can. There has been terrible misinformation flying around in the press.

    To meet new Government standards you can do one of two things;

    a) Buy and cancel UN Clean Development Mechanism (CER) credits.

    b) Buy and cancel European Union Allowances (EUAs)

    PURE could theoretically hence do either and remain compliant with the new UK Government Code – but today – PURE deliberately focuses on (a) for the reasons agreed higher in this thread. The CDM/CER route is (temporarily) the only fully credible one and guarantees a real emissions reduction.

    The problem with (b) is that the environmental intergrity of phase 1 EUAs has been damaged by over allocation by some national governments during the pilot phase of EU-ETS. However, this isnt a problem with phase II EUAs nor with the new harsher national allocation plans recently announced. You can see the difference in environmental integrity just by comparing the carbon market prices of CERs V EUAs II V EUAs I. The prices for the latter has collapsed.

    Whilst Phase II EUA’s are only trading on futures markets their prices are above comparable CERs which is a result of their scarcity. Scarcity creates demand; demand creates value; value and incentive encourage emissions reductions – especially when you consider the alternative to reducing emissions (and the incentive) is a 100 Euro per tonne additional fine (after 2008). The EU-ETS is a brilliant system, but it needed to settle down in its pilot phase. Unfortunately many jounalists just wanted to focus on the negatives and have not fairly reported.

    This gave the Government a tricky problem with its new offsetting Code. It might easily have excluded phase I EUA’s and waited until Phase II are available. But this might have undermined public perceptions of the (very credible) phase II and EU-ETS itself. Instead, they came out very strongly in favour of project based CDM credits and correctly so. Responsible offsetting organisations (like PURE) won’t ever buy phase I EUAs that have been released by over allocation and this is simply a transitional problem until EU-ETS enters phase II.

    Focus on CERs (and CDM) today means the highest possible project based integrity and we can largely forget EU-ETS. However, taking either a EUA or CER out of circulation can have the effect of helping to reduce the emissions cap in Europe. CERs can be used instead of EUAs for compliance purposes. However, CERs have already supported an emissions reduction in the developing world so they offer a potential double win-win.

    PURE may buy some phase I EUA’s in very special circumstances. For example, some British universities and hospitals embraced by EU-ETS are achieving genuine emissions reductions so have credits available that are NOT as a result of over allocation. If PURE buys these, these vital organisations then receive funding for their reductions; have money to do even more good climate change work; and don’t need to eat into money designated for medical stuff and education to meet their EU-ETS emission reduction obligations.

    However, as a general rule PURE will focus on CERs (about 90%) until phase II EUAs are released and even then that’s subject to the environmental integrity of EUAs in each vintage (year) being confirmed/maintained.

    Sorry it is all so complicated, but PURE is doing its very best to make sure that it offers the best methodology. One should have confidence when one notes that PURE’s Trustees include Jed Jones, Export Adviser to UK Business at the Climate Change Projects Office and Sir David Brewer, former Lord Mayor of the City of London. Sorry if this has now come across almost as an advert, but PURE is a charity truly doing the right things and it deserves your support.

  19. matt says:

    Phil,

    Thank you for explaining in such detail.

    The piece from your reply that explains things clearly for me is this;

    > ‘For example, some British universities and hospitals embraced by EU-ETS are achieving genuine emissions reductions so have credits available that are NOT as a result of over allocation. If PURE buys these, these vital organisations then receive funding for their reductions; have money to do even more good climate change work; and don’t need to eat into money designated for medical stuff and education to meet their EU-ETS emission reduction obligations.’

    Do you know if schools are to be included in the EU-ETS emissions reduction obligations Phase II, as hospitals & universities have? The school I work with has already invested one half of £25,000 into a solar photovoltaic system. We could do with some financial reward. 🙂

    Many thanks

    Matt Burge

  20. Kevin Smith says:

    Hey, I saw that you had mentioned offsets and I wanted to let you know that there is a new report published this last week on the offsets industry, The Carbon Neutral Myth – Offset Indulgences for your Climate Sins. Free download from http://www.tni.org

    Carbon offsets are the modern day indulgences, sold to an increasingly carbon conscious public to absolve their climate sins. Scratch the surface, however, and a disturbing picture emerges, where creative accountancy and elaborate shell games cover up the impossibility of verifying genuine climate change benefits, and where communities in the South often have little choice as offset projects are inflicted on them.

    This report argues that offsets place disproportionate emphasis on individual lifestyles and carbon footprints, distracting attention from the wider, systemic changes and collective political action that needs to be taken to tackle climate change. Promoting more effective and empowering approaches involves moving away from the marketing gimmicks, celebrity endorsements, technological quick fixes, and the North/South exploitation that the carbon offsets industry embodies.

    Carbon Trade Watch promotes a critical analysis of the use of market-based mechanisms as a means of dealing with climate change. By centering its work on bottom-up community-led projects and campaigns, Carbon Trade Watch aims to provide a durable body of research which ensures that a holistic and justice-based analysis of climate change and climate policy is not forgotten or compromised.

  21. matt says:

    The report Kevin highlights above is also available here;

    http://www.carbontradewatch.org/

    It’s interesting to note that Gordon Brown’s recent (leadership campaign) speech to the Green Alliance had global carbon trading (administered from London) as a central plank to his approach to tackling climate change.

  22. jignesh desai says:

    do you know in which university launch this carbon offsetting course ?

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