It takes a good dose of humility to laugh at your own weaknesses. Industry
reactions to John Oliver’s recent “Last Week Tonight”
segment on carbon offsets have shown the
voluntary carbon market to be somewhat lacking in this department.
In the face of Oliver’s sharp-tongued analysis, the overall mood in industry
circles was defensive. However, while Oliver was hyperbolic on many accounts, he
touched upon some of the very real issues the market is facing that industry
veterans like myself have been trying to solve for decades.
This is troubling; because, by failing to acknowledge our sector’s flaws, we
could hinder meaningful progress on real issues going forward — namely, making
sure carbon offsets actually contribute to reducing GHG emissions.
Worryingly, much of the defensive rhetoric in industry circles hinges on the
false idea that the voluntary carbon market plays an unprecedented role in
tackling climate change, making it too big to fail. This is a myth: The truth is,
the voluntary carbon
market
is still relatively small. Last year, it grew to 360m tcoe2 or 0.9 percent —
yes, less than 1 percent — of global emissions. Finance-wise, the market is
currently worth about $2bn, whereas climate finance totals over $600bn. For
this reason alone, as Oliver rightly highlighted, “We cannot offset our way out
of climate change” — at least not at the current pace and scale.
Even so, if employed correctly, carbon offsets can be life-changing for both
people and the planet. For more than a decade, I have had the privilege of
working closely with passionate project developers committed to using carbon
finance
to unlock multiple sustainable development benefits beyond climate. I have seen
firsthand how access to clean and affordable energy programs — such as Dutch NGO
SNV’s domestic biogas
program
in Vietnam — are great examples of how transformative offsetting can be.
Instead of completely writing off carbon offsets like Oliver did, or pretending offsetting is delivering on expectations without fault, we need to confront the challenges we face — and open up discussion about how we solve this collectively, rather than in silos behind closed doors.
Put plainly: We need to ‘fix offsetting’ and be vocal about it; so that many more of these impactful programmes can take place.
Ultimately, the problem with arguments on both sides of the spectrum is that
they shut down dialogue. It’s easy to poke fun at corporate climate pledges that
depend solely on carbon
offsets;
just as it’s easier for the industry to deflect blame, rather than engage in the
self-scrutiny needed to make offsetting more credible.
The voluntary carbon market is expected to grow
significantly,
to reach an estimated value north of $50bn in the coming years. There is an
opportunity to use this growth to help protect the environment and our future as
a species, but we will waste it if industry veterans and their critics simply
continue to butt heads about who is right or wrong.
The hard truth is that the longer the industry buries its head in the sand, the
more carbon offsets lose their potential to engender real change. We should be
thankful Oliver has mainstreamed awareness of the technicalities and challenges
we face — as we need more open and constructive discussions to make progress.
Some of the issues he rightly identified were:
Despite broad alignment within the industry on high-level offset-quality
criteria — such as
additionality
or permanence —
real-world implementation differs greatly between projects and standards, which
opens the door to significant variations in offset quality. The development of
core carbon principles by the Integrity Council for the Voluntary Carbon
Market is a step in the
right direction, but it remains to be seen if it will be detailed enough to
effectively drive a flight to quality.
2. The difficulties that arise from continuous improvements in methodologies.
Whilst virtuous and something we can all celebrate, continuous improvement means
by definition that future methodologies will be of higher quality than present
and past ones. In this context, how do we deal with ‘lower-quality’ credits
issued from older methodologies?
As an industry, I hope that we can embrace this challenge and work to
collectively solve it, rather than pretending it’s not there. A solution to
these two challenges possibly lies in technical alignment between leading
standards. Practically, this means the technical decision-makers of leading
standards — such as Gold Standard and
Verra — formally engage with each other to openly share
learnings and challenges and co-design solutions. This would drive a race to the
top — a virtuous cycle where proper action is being recognised, rewarded and
incentivised
3. Misleading carbon-neutrality claims by companies.
As an industry, we should openly acknowledge that some companies’ practices are
highly problematic. We can no longer pretend that we can fly and be climate
heroes — as Dutch airline KLM did with both its 2019 'Fly Responsibly'
campaign
and this year’s ‘Fly CO2 Zero’
campaign.
There is no such a thing today as carbon-neutral fossil fuel. The prerequisite
to any form of claim — be it carbon neutral or net zero — is to have embarked on
an ambitious decarbonisation pathway. The fact that companies with problematic
claims are also the ones pouring hundreds of million dollars into new offset
projects is clearly not helping. Would these companies be willing to proactively
engage with civil society and consumer groups to align on shared principles for
the use of offsets?
Like any powerful tool, offsets can be harmful if they are not designed or used
properly. The truth is that the voluntary carbon market is only one tool in the
climate action toolbox — and one that still needs work. The task is humbling;
and time is running out.
We need to embrace the critics, open up dialogue and be vocal about our work to
collectively solve these challenges; addressing our industry’s flaws head on
will only challenge us to do a better job at ensuring our future on this planet.
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Marion Verles is CEO of SustainCERT, a global carbon impact verification organization developing digital verification solutions to bring credibility to corporate climate action.
Published Sep 8, 2022 8am EDT / 5am PDT / 1pm BST / 2pm CEST