Carbon Abatement: Making sense of offsets

The increasingly popular market for carbon offsets is complex, with significant differences between what's on offer from a variety of organisations. Adding to the complexity is the strong feeling in some quarters that companies claiming carbon neutrality should have done some work to reduce their own emissions, and some questions surrounding the popular practice of tree-planting.

EVERY month there are new reports of companies resolving to offset their carbon emissions or even to become carbon neutral, but such claims may not be what they seem, according to two new reports. The reports, by Total Environment Centre (TEC), caution care in embarking on carbon offset and neutrality programs.

In Neutral and Beyond the TEC defines a carbon offset as "a unit of saved, abated (reduced) or sequestered (removed and stored) carbon equivalent greenhouse gas that is sold to an individual or organisation wishing to compensate for the same amount".

"Carbon equivalent gas" includes carbon dioxide, but also other greenhouse gases (GHGs) such as methane and nitrous oxide.

The second report, Carbon Neutral Watch - Corporates, Consultants and Credibility, emphasises that there is no agreed definition of "carbon neutral" and argues that offsetting all emissions off-site should not be seen to equate to carbon neutrality.

It says carbon neutrality "represents a higher quality of action by changing business-as-usual behaviour as the bulk of response to global warming."

"As the principles and practices of offsets are increasingly scrutinised, it is likely that becoming 'carbon neutral' will become distinct from the use of offsets, or the term will become tarnished," the report says.

There are signs this is already happening, as Neutral and Beyond points out, with web site alleging that "carbon offsetting is about paying for the right to carry on emitting carbon."

Carbon Neutral Watch says four steps lead to carbon neutrality: assessing a carbon footprint; implementing on-site emissions-reduction measures; computing remaining carbon emissions; and purchasing greenhouse gas offsets.

One company which seems to be heading in the right direction with its strategy is News Limited.

Sydney's Daily Telegraph reported at the end of June that its parent company planned to cut GHG emissions by 20% and become carbon neutral in three years.

Chief executive John Hartigan was quoted as saying aggressive emissions targets would be met through increased efficiency and renewable energy, and that carbon credits funding alternative energy sources would be used as a last resort.

ANZ also announced a significant emissions-reduction scheme in May, underpinned by designing a new building with wind turbines, solar silver cells, a landscaped roof and storm water re-use.

The building will not be occupied until 2010, but in the interim ANZ has announced initiatives such as changing lighting schedules to switch off when people leave a room, converting to more energy-efficient computer screens and buying renewable energy to offset its greenhouse gas emissions.

Choosing a program

The TEC reports highlight significant differences in the quality and price of various offsetting programs. Carbon Neutral Watch says consumers may choose a cheaper product without being aware that it is also inferior.

It says most Australian companies offer tree-planting offset schemes, but that concerns have been raised about the value of this practice.

It cites one study which found trees may contribute to global warming by emitting methane, and questions whether carbon emitted by soil disturbance when trees are planted negates the benefit of the carbon sequestered by the trees.

The Carbon Neutral Watch report questions what happens to the sequestered carbon when the tree dies.

It also highlights the fact that offsetting does not occur immediately. A study by two universities, for example, found "an offset bought through British company Climate Care would take about 100 years to recapture the carbon emitted by a flight."

"When we consider the warnings of climate scientists that we have 10-15 years to move on climate change, such long lead times render such offsets invalid," the report says.

Carbon Neutral Watch says more valuable offsetting schemes are those that stimulate investment in green technologies that reduce emissions at the source (such as renewable energies).

The report says external and independent accreditation, monitoring and auditing are essential.

This article first appeared in Business Community Intelligence, August 2007