Is carbon offsetting greenwashing?

In the fight against climate change, one of the most popular solutions is carbon offsetting. Carbon offsetting essentially means paying someone to reduce your greenhouse gas emissions by buying their equivalent amount in carbon credits. The idea is that you neutralize your own emissions with someone else’s, making it an effective way to combat global warming while minimizing your impact on the environment. Unfortunately, this is not as simple as it may seem. In fact, there are a number of problems with carbon offsetting programs has led many to ask the questions – “is carbon offsetting greenwashing?” Let’s take a look at why.

What is carbon offsetting?

Carbon offsetting is the process of reducing greenhouse gas emissions through the purchase of “carbon credits” generated by projects that reduce greenhouse gas emissions. These emission reductions are often achieved through activities such as planting trees, diverting waste from landfills, and installing equipment that captures carbon dioxide and stores it underground. 

Carbon offsetting is a complex and controversial field of environmental advocacy, and the concept is often misunderstood. The basic idea is that by reducing the amount of greenhouse gases emitted by the activities that create our modern economy, we can “offset” the greenhouse gas emissions that result from living our modern economy. In other words, that we can reduce our greenhouse gas emissions while still keeping our economy growing. For some time now, it has been suggested that this can be accomplished by purchasing carbon credits from people who are reducing their emissions. The idea is that by investing in carbon offsetting, you are supporting projects that help reduce greenhouse gas emissions and help our environment. At the same time, you are getting a financial return on your investment.

How does carbon offsetting work?

Carbon credits are essentially a tradable commodity. You can purchase them on the open market, or you can trade them with other groups through a financial intermediary like an investment bank, or you can trade them directly with other groups. For example, let’s say a company owns 1 million tons of carbon dioxide. If that carbon dioxide is emitted into the atmosphere, it will contribute to global warming. But if the company instead burns that 1 million tons of carbon dioxide and emits the same amount of greenhouse gases, then the company has also emitted 1 million tons of greenhouse gases. If the company then sells 1 million tons of carbon credits to offset those greenhouse gas emissions, that the company has emitted, it has offset its own greenhouse gas emissions.

Deforestation and other land use impact in carbon offsetting

One of the biggest problems with carbon offsetting is that it often encourages deforestation. In many developing countries, the government encourages businesses to use forestland for economic activity. So if a company in a developing country owns a forest, it may be able to offset the emissions created by logging that forest. But since forests cover nearly a third of the land on Earth, this creates a problem. It means that carbon offsetting encourages logging in many non-forested countries.

Carbon neutrality vs. carbon offsetting

There are organizations that promote carbon neutrality. This means that the world should not be emitting more than it takes in. But carbon neutral means many different things to many different people. For example, some people believe that we should only emit as much carbon dioxide as we sequester. This means planting trees, building better buildings, and other initiatives to make sure that carbon dioxide is not released back into the atmosphere. Others believe that we should not emit any carbon dioxide, even if it means that we do not sequester any carbon dioxide. So while many people believe that carbon neutrality is a desirable goal, it is not the same thing as carbon offsetting. Carbon neutrality is much more controversial than carbon offsetting, and it is much more difficult to achieve.

What are the drawbacks of carbon offseting?

The global market for voluntary carbon offsets has grown rapidly (up over threefold in 2020-2021 to $2 billion) and it is estimated that  the primary market for voluntary carbon credits could increase by as much as 40% to around $1.9 billion in value in 2023. 

However, the Climate Change Committee has stated in no uncertain terms that business use of carbon offsetting risks delaying Net Zero, and increasingly, companies are hesitant to buy carbon credits as the market faces criticism and coming standards remain unclear. This was recently highlighted during an investigation into Verra,  the world’s voluntary offsets market, which found that more than 90% of rainforest carbon offsets by the biggest certifier are worthless.

This is no suprise given some of the drawbacks of carbon offsetting which include: 

Difficulty in verifying emissions reductions

Carbon offset projects can be difficult to verify, making it challenging to ensure that the emissions reductions claimed by the project are real and permanent.

Baseline and additionality

It can be difficult to determine the baseline level of emissions that would have occurred without the offset project, and to prove that the emissions reductions achieved by the project are truly additional to what would have happened anyway.

Double counting

There is a risk of double counting emissions reductions if the same carbon credits are used by multiple companies or countries.

Lack of transparency

The carbon offset market can lack transparency, making it difficult for consumers to know where their offset payments are going and what impact they are having.

Displacement of responsibility

Carbon offsetting can be seen as a way for companies to deflecting or postponing responsibility for their emissions, rather than taking meaningful action to reduce them.

Lack of long-term impact

Carbon offsetting is a short-term solution that does not address the underlying causes of emissions. It does not guarantee long-term emissions reductions and may delay more meaningful action to reduce emissions.

Is carbon offsetting greenwashing?

Carbon offsetting can be seen as a form of greenwashing if it is used as a way for companies to deflect attention away from their actual emissions and avoid taking meaningful action to reduce them.

Carbon offsets work by allowing companies to pay for emissions reduction projects in other sectors or regions, rather than reducing their own emissions. This can give the impression that a company is doing something to address its environmental impact, while in reality it may not be taking any meaningful action to reduce its emissions.

If a company is relying heavily on carbon offsets while continuing to emit large amounts of greenhouse gases, it can be seen as greenwashing. This is because offsetting should be seen as a complementary approach to reducing emissions, not as a substitute for reducing emissions.

However, if a company is using carbon offsets as part of a larger strategy to reduce its emissions and actively working to reduce its environmental impact, then some argue it may be seen as a legitimate effort to address its environmental impact, although this is becoming increasingly debatable.

Companies that use carbon offsetting as part of their sustainability strategy

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