Whether as competitive differentiation, long-term risk management, or hedging against future regulation, internal carbon fees are becoming increasingly popular with companies as varied as Shell, Microsoft and Disney. Rather than use some or all of these funds to buy carbon offsets, however, a new solution called “onsetting” is emerging that enables businesses to increase employee engagement, support their local communities, and amplify their philanthropic giving while building awareness and action around climate change.
Traditionally, purchasing carbon offsets within the Voluntary Carbon Market (VCM) has been the only option to account for a company’s unavoidable emissions. To their credit, offsets have supported many good sustainability projects and they do enable buyers to claim carbon neutrality. But, they are also plagued by concerns around inefficiency, lack of additionality, leakage, perverse incentives, and comparisons with 16th-century indulgences where parishioners could pay the church to absolve them of their sins.
More broadly, offsetting limits how we think about and respond to climate change. Is it really enough for your business to be carbon neutral when the world clearly isn’t? If, by some miracle, every company suddenly decided to offset their emissions, we would quickly run out of mitigation projects to support. And if, by an even larger miracle, humans halted all carbon pollution today, there’s already enough in the pipeline that we’re still going to have to deal with 10+ feet of sea level rise, rampant spread of vector-born diseases, declining agriculture and fisheries, millions of environmental refugees, and other consequences of global warming.
While many offsets have clear social benefits, these broader impacts of climate change are generally not factored into their costs, which have averaged around $6/mtCO2e on the VCM. The U.S. government currently estimates this “Social Cost of Carbon” (SCC) at $39 when setting CAFE standards and other policies, and some argue this figure should be as high as $266. So, offsetting constrains both the breadth and depth of how we respond to global warming.
These sustainability leaders and more ...
Hear insights from sustainability leaders from Unilever, Patagonia, Interface, Microsoft, Nestlé and many more at the return of our live (and virtual) flagship event, SB'21 San Diego — October 18-21.
Rather than limiting ourselves to carbon neutrality, let’s set broader goals to support a healthy planet for our children and all life. Yes, of course we need to reduce carbon pollution as quickly and as fully as possible. But we also need to do so much more! We need to preserve biodiversity and wilderness; we need to develop local and resilient food systems; we need to fight for climate justice; and we need to deconstruct and replace the political and economic systems that got us into trouble in the first place. We can’t support any of this through offsetting.
Recognizing these challenges, a social venture called Earth Deeds has developed a new option called “onsetting” that drops the controversial claim of carbon neutrality, prices emissions based on the U.S. Government’s SCC, and enables funding to support local and meaningful sustainability projects that are responding to climate change.
Rather than “neutralizing” our environmental “sins” through carbon offsetting, onsetting invites us to become “carbon conscious.” Rather than guilty indulgences, let’s be grateful for all that fossil fuels have enabled. At the same time, let’s also recognize and internalize the environmental cost of burning them, and pay it forward and support sustainability projects that have meaning to our businesses and constituents. Onsetting resolves the problems of offsetting and offers the following benefits:
- Increased efficiency: By avoiding costs associated with third-party verification, traders, and project developers, at least 85 percent of funds can be sent to the projects.
- Support for small, local and non-mitigating projects: Earth Deeds has an extensive database of projects, but companies are encouraged to locate (or create!) local projects that fit with their mission and values. And because onsetting is not about buying “neutrality,” funds can also support existing projects that do not directly mitigate CO2 emissions, such as education and social justice programs.
- Trust in the process: All transactions are transparent, use of funding is local and visible, and concerns around additionality and leakage become irrelevant.
- A positive story: Through easy-to-use online tools, businesses measure their emissions and generate positive stories of accounting for their environmental costs and giving back to their communities and the planet.
By working with Earth Deeds, companies can increase their CSR and their philanthropic impact. For example, CISabroad onset emissions from its study abroad programs and supported local environmental projects in 14 of their host communities. The Boulder Chapter of Citizens’ Climate Lobby used Earth Deeds for their annual appeal to members who onset their emissions to support CCL’s lobbying for a national carbon fee and dividend program.
- engaging your company's employees to onset their commuting and support sustainability projects in their local communities;
- channeling your corporate philanthropy to create matching grants for other groups to onset their emissions and support projects that have meaning to your company; or
- inviting Sustainable Brands conference participants to onset their travel emissions and capitalize a Climate Leadership Award given to a project submitted and voted upon by SB members.
The possibilities are endless.
Global warming is likely the greatest threat humans have ever faced and it is unfolding in our lifetime. Onsetting’s “big solution” is empowering the millions of people and projects working now to create sustainable communities and healthy ecosystems. Let’s work together to support the positive changes we wish to see in the world.