Carbon Offsetting – friend or foe?
20 January 2020
Carbon offsetting is essentially paying someone else to clean up one's own pollution.
The concept alone raises ethical concerns that are further exacerbated when one considers the too-good-to-be-true price and the remote, seemingly theoretical, unverifiable nature of many of the schemes available on the market.
Although called 'carbon offsetting', a better description would be 'greenhouse gas emissions offsetting' (where in most instances, the prominent gas is carbon dioxide). The aim is to reduce the net amount of greenhouse gas emissions, in response to the need to stop global warming. In general, there are two types of schemes; (1) schemes that aim to reduce the amount of fuel being burnt by other people, for example paying to improve the insulation on somebody else’s house and (2) schemes that absorb carbon dioxide from the atmosphere, for example paying someone to grow trees.
Even highly efficient buildings need energy to run them in the form of electricity or possibly gas, so incur carbon emissions at power stations or the building's boiler flue. For a building to achieve net zero carbon status, you can make use of carbon offsetting, but there are also a number of alternative options, including:
- Generating your own renewable energy on site
- Buying remote (off-site) renewable energy assets and paying somebody to ship the energy to you
- Entering into a power purchase agreement (PPA) with a renewable energy developer to feed renewable electricity into the national grid
- Buying electricity and gas from a "renewable" energy tariff
All of these have their own complications or limitations. Generating renewable energy on-site, for example with solar PV panels is relatively straightforward up to a certain amount. However, for most buildings, even if one covered the entire roof with PV panel not enough energy would be generated to meet a building’s annual demand. Buying off-site renewable generators or setting up a PPA are complicated and not necessarily available to most consumers. Renewable energy tariffs (such as Ecotricity or Bulb) are reported to not stimulate the required growth rate (known as “additionality”) in the amount of renewable energy generators required for the future.
Carbon offsetting is therefore understandably often seen as the only, or easiest, option. But should we be doing it? And if so, how reliant should we be on it, how much should it cost, and how should we do it?
Carbon offsetting schemes
Commercially available carbon offsetting schemes include buying carbon credits from a wind farm in India (2£/tCO2e); buying carbon credits associated with protecting and rejuvenating Amazon rainforest in Brazil (4£/tCO2e); buying carbon credits from a borehole rehabilitation project in Uganda (4£/tCO2e) and funding solar PV electricity systems on UK schools (200-400£/tCO2e). Some of the carbon emissions reduction methods can seem tenuous; in the case of protecting Amazon forest the logic is that funding the offsetting scheme will maintain photosynthesis from an area of forest that otherwise would have been cut down. In the case of the boreholes, the logic is that by funding potable water from a borehole the recipient community will not have to burn fuels to sterilize water for drinking.
Many offsetting projects are accredited by one of various certification schemes available (such as VCS1 or Gold2 Standard), which put in place a range of procedural requirements geared towards increasing the likelihood that the scheme actually reduces (or absorbs) global carbon emissions whilst minimising the risk of adverse consequences (such as damage to ecosystems). But do they work in reality? Many people think not, at least for certain types of scheme. A detailed study commissioned by DG CLIMAA (an EU climate department) concluded that “73% of the potential 2013-2020 Certified Emissions Reduction [a set of major international carbon offsetting] schemes have a low likelihood that emission reductions are additional and are not over-estimated”3. In a joint statement, Friends of the Earth, Greenpeace and WWF state that they don’t support forestry [carbon] sink projects. The reasons cited include; the risk that the forest is not permanent, estimating the amount of carbon absorbed is risky, adverse environmental impacts of monocultures and that buying forestry offsets does nothing to lessen society’s dependence on fossil fuels. They go on to recommend that those considering purchasing carbon offsetting should prioritise energy demand reduction measures and only then use Gold Standard renewable energy or energy efficiency offsetting schemes4.
A real risk of using carbon offsetting is that it lures governments, organisations and individuals into a false sense of security or provides them with convenient excuses; they are being told that for a pittance their business-as-usual fossil fuel burning activities are carbon neutral and guilt free. Yet, if the carbon offsetting schemes they purchase don't work, then atmospheric global CO2 concentration will not reduce.
All carbon offsetting schemes have risks of failure.
On the flip side, if some offsetting schemes do indeed reduce net carbon emissions for a low price, why not use them? Furthermore, many offsetting schemes are reported to provide secondary benefits such as rainforest conservation or improved livelihoods for some of the world’s poorest people. It's a seemingly win-win situation. But we're not convinced. Relying on offsetting does not reduce the amount of fossil fuels being burnt which is the primary need to address climate change. Land area is also an issue. The current rate of greenhouse gas emissions from the UK is 450MtCO2e/yr. If one attempted to achieve net zero for the UK by tree planting alone, it would require a land area three times larger than the UK.
Our offsetting temporary solution
We're currently using the UKGBC Net Zero Carbon building framework for the operational energy-related carbon emissions for our portfolio of five offices. The UKGBC Framework does not require or recommend a carbon price or type of offsetting scheme. It is possible to purchase accredited carbon offsetting from a variety of providers for as little as 2£/tCO2e. If we did this, our practice’s annual carbon offset would cost £146, less than £1 per staff member per year. We’re not convinced that this is a reliable path to net zero carbon for us, the UK, or the planet as a whole; it doesn't feel like an environmentally responsible approach. If the true cost of reducing carbon emissions for everything was this cheap then wouldn’t the problem be solved by now? Furthermore, such a low price means there is no incentive for building operators to invest in energy efficiency improvements that are a reliable (and UKGBC preferred) path to net zero carbon. Our research has found that various other sources such as the Centre for Climate Change Economics and Policy5 and the Committee for Climate Change6 think that the price of greenhouse gas emissions needed to instigate improvements in the UK Building Stock to achieve net zero carbon is in the region of 30-450£/tCO2e.
What we as a practice, would ideally like to do, is invest money in our buildings, rather than offsetting. On things like improved insulation, improved glazing or electric heat pumps to reduce our buildings’ energy needs and related carbon emissions. We have already done a great deal of this, investing hundreds of thousands of pounds over the last 20 years. For example, we upgraded our Cambridge office from a (energy and carbon rating) EPC G to an EPC A. The challenge is that planning and implementing more improvements is both expensive and takes time (years) to implement, whereas, we want and need to be carbon neutral now.
Our research has found that the price of carbon needed to instigate improvements in the UK Building Stock is in the region of 30-450£/tCO2e.
Considering all of this, we have decided to voluntarily pay 100£/tCO2e to offset our emissions. Our annual carbon emissions from our 5 offices have been calculated to be 73tCO2e/yr, meaning our annual carbon fund is £7,300. We have chosen to fund UK woodland creation to mitigate our emissions. The scheme we have procured is Woodland Creation for Carbon Capture by Forest Carbon Ltd, which is accredited under the Woodland Carbon Code7. The location of the woodland is Arnott’s Loan in East Lothian. The sale price from Forest Carbon is 7.50£/tCO2e, 13 time less than our voluntary price. We have therefore purchased 13 times more offsetting (970tCO2e) than required to meet our 73tCO2e/yr emissions. This notionally covers one year of our building-related carbon emissions. One can think of this as accelerated carbon offsetting.
When selecting an offsetting scheme we considered the pros, cons and perceived likelihood of success (actually reducing atmospheric CO2 levels). The main influencing factors for choosing UK woodland creation were:
- Growing biomass is a carbon sink. Carbon sinks are needed as part of a net zero future
- The project is in the UK so, if we want, we can visit to verify that it does indeed exist
- Woodland creation brings other ecological benefits, and
- We thought that investing our entire fund in one project would increase its likelihood of success.
If one attempted to achieve net zero for the UK by tree planting alone, it would require a land area three times the size of the UK
As mentioned earlier, our chosen strategy isn't universally or nationally sustainable; there isn't enough land area in the UK to absorb all the UK's emissions using woodland creation. Reduction in actual energy demands and emissions is needed. This is why we have also made a pledge for continual improvement.
In conjunction with voluntarily paying 100£/tCO2e to offset our emissions, we plan to annually assess our buildings for potential design modifications that would result in reductions in energy demand and carbon emissions. If we can find feasible design options that are predicted to result in reductions of emissions at a cost of less than 100£/tCO2e we will invest in these in preference to purchasing offsetting. In addition to this, each year we will review and potentially adjust our 100£/tCO2e voluntary carbon price. For example, a back of envelope analysis on our own London office has shown that replacing our gas boilers with heat pumps would have a large carbon benefit with an anticipated cost (based on a 20-year duration) in the region of 100-300£/tCO2e.
The choice of analysis duration (or lifetime) is a significant factor when analysing the cost of design options. The concept of £/tCO2e means the capital cost invested divided by the reduction in carbon dixoide equivalent emissions over the lifetime of the design option being considered. The shorter the considered timescale, the more expensive the intervention appears. Many commercially available carbon offsetting schemes are based on a 60-year duration, which is one of the reasons they appear low cost. People considering the purchase of offsetting need to ask themselves, "when do the carbon emissions need to be reduced, now or in 30 to 60 years’ time?" The answer is now, within the next 10 years.
Carbon offsetting isn’t the route to net zero. In their Net Zero UK report the CCC set out a recommended strategy for the UK to become net zero carbon by 2050. In this report they state “Most sectors [including buildings and power stations] will need to reduce emissions close to zero without offsetting; the target cannot be met by simply adding mass removal of CO2 onto existing plans”. They do include a small amount of offsetting in their strategy for the whole UK and point out that this needs to be reserved for the hard-to-treat sectors of aviation, shipping and agriculture; not buildings.
For building owners, tenants, managers, designers or other stakeholders wanting to take steps towards net zero carbon the recommended priorities are to invest in energy efficiency improvements on their buildings, low carbon heating systems and renewable energy generators in preference to offsetting. However, it is known that these things are both challenging and take time to deliver and fund. Making use of carbon offsetting (and renewable energy utility tariffs) in conjunction with a medium term (10 year) plan to implement the recommended building improvements is an environmentally responsible strategy.
A net zero future needs more renewable energy generators, it needs more forest to act as carbon sink and it also needs to protect and rejuvenate biodiversity. It therefore seems reasonable to us (whilst acknowledging their inherent risks of failure) to make use of these types of carbon offset schemes in conjunction with a plan to improve one’s own buildings. It seems sensible to make use only accredited schemes such as the Gold Standard or the Woodland Carbon Code that put in place QA procedures to increase the chance of success whilst reducing risk of adverse impacts.For buildings, carbon offsetting is a short term fix not a long term solution.