The Next Economy
Carbon Neutral Is Dead; Long Live Nature Positive

Since the term ‘carbon neutral’ was first introduced, thousands of companies have issued reports and strategies outlining the myriad ways they plan to offset their carbon emissions in a few years — with tree planting being the marketing-friendly offset of choice.

However, paying to pollute — as some see it — has never been without controversy. And recently, many have questioned if any of those trees were planted, anyway. The ‘carbon-neutral industry,’ based upon buying offset credits equal to your emissions, is in a crisis faintly reminiscent of the climate crisis it’s supposed to help solve.

When the carbon-neutral craze started, it felt bold and groundbreaking. In 1988, Allied Energy Services and the World Resources Institute introduced the first-ever project to offset emissions from a coal-fired power plant. In 1997, more than 150 countries had signed the UN’s Kyoto Protocol — an international treaty that aimed to limit or reduce greenhouse gas (GHG) emissions. Emissions trading was one of the three core mechanisms of the treaty — carbon became an internationally recognized commodity; and the carbon market was born.

In the early 00’s, major companies including Sky Media and Google became some of the first to offset their emissions or go carbon neutral — setting off a domino effect of companies announcing ambitious targets and goals.

Many of these pioneers were credible and committed to transferring vast amounts of capital from polluting industries in rich countries to finance nature-based projects in poorer ones. It’s been reported that the voluntary carbon market has directed over $5 billion into international projects addressing social and environmental issues, ranging from providing local communities with clean cookstoves to protecting biodiversity. In many ways, carbon offsets were an attempt to redistribute capital, not just carbon.

But, in the years since then, we’ve learned that that’s not how carbon really works. With our legacy, ‘permission to pollute’ is no longer viable. Like other areas of sustainability, over the years many honest and well-intentioned attempts to redistribute emissions have become excellent fodder for corporations to greenwash their efforts.

For example, while carbon offsets promised the benefit of delivering economic benefits to poorer nations, they have perpetuated the exploitation of indigenous communities in some cases. The lack of transparency in the market has also led to the sale of outdated offsets from projects over a decade old and otherwise ineligible for trade on most commodity exchanges.

The shiny market of offsets is feeling murkier by the day. But we don’t want to throw the baby out with the bathwater. It’s important to remember the power of the carbon-neutral concept:

1. The public understands the necessity for climate action and wants companies to do more. This recognition has taken over a decade to build; and for many companies of all sizes investing in offsetting, consumer recognition motivates them. This is all voluntary — and that requires a business case. The size of the cheques that companies sign to nature is directly proportional to the size of the reputational value.

2. Carbon-offset projects do transfer huge sums towards people and nature when they respect the knowledge and rights of local and indigenous communities. For example, Carbon Tanzania’s project in partnership with the Hadza people has reportedly captured an estimated average of 22,000 tonnes of carbon dioxide annually in its first seven years of operation, resulting in nearly $500,000 in revenue to the community.

Which is why I don’t believe we should just dump offsetting or carbon neutrality. Some may be ok with the decimation of that market because the risk of greenwashing and the poor quality of many offset schemes are a bigger problem than losing the positive impacts. But doing so will cut off massive capital flows to projects and programs that benefit people and nature. And we do have viable options in nature-based solutions, including nature restoration and regenerative agriculture.

The only viable alternative at the moment seems to be Nature Positive. This idea started with a demand for governments to be nature-positive by 2030 by taking urgent action to halt nature loss now — which culminated in a corresponding pledge by over 190 countries at COP15 in December. Investors worldwide are waking up to the reality that nature-based solutions offer a viable and lucrative solution to the climate crisis. In the last five years, natural climate solutions have received $21 billion in investment.

There has been some debate regarding the definition of “nature positive.” As Oxford biology professor EJ Milner-Gulland argued late last year, “It is already starting to feel like any actions that increase biodiversity anywhere, and by any amount, can be called nature positive. This trend has to be resisted.”

Ultimately, the concept of nature positive aims to address ecosystem degradation by actively promoting the recovery and resilience of biodiversity. The approach goes beyond conservation efforts — emphasizing ecosystem restoration, biodiversity conservation, and sustainable use of natural resources. The nature-positive by 2030 target is intended to be harmoniously integrated with the Sustainable Development Goals (SDGs) and the climate targets outlined in the Paris Agreement.

There are three basic measurements for a nature-positive goal:

• Zero net loss of nature from 2020

• Net-positive improvement in nature by 2030

• Full recovery of nature by 2050

It’s a goal we all need to get behind to have a chance of reaching the same level of recognition and business value as net zero. The WEF’s Future of Nature and Business report estimates that a nature-positive future “can unlock an estimated $10 trillion of business opportunities.”

But this concept currently misses two crucial attributes:

• A straightforward way for companies to determine exactly how much they should be giving to such solutions.

• A cause with huge public familiarity and value would take time to build. é

On the one hand, claiming to be carbon neutral while continuing to conduct business-as-usual isn’t sustainable. Conversely, ending massive capital flows to projects that benefit nature would be a disaster. Instead, we need to invest in public campaigns for nature positive — and for brands to shout it from the rooftops. That way, we save what was originally valuable about offsets while actually doing what’s right for nature.