Can technological breakthroughs help solve the climate crisis? Photo by Martin Adams.

Carbon Offsets: A Sector Ripe for Innovation?

The Climate Change Dilemma

But what is behind these ‘net-zero’ commitments? Simply put, net-zero means that our greenhouse gas emissions are in balance with our greenhouse gas removals; and to achieve this, radical change is needed both at a local and a global level. Carbon removal will play a key part in meeting these climate goals. In this set of blog posts, we introduce some of the many innovations being brought forward to solve this complex dilemma.[1]

What are carbon offsets?

So, what are carbon offsets? Simply put, they are activities which lead to a reduction of greenhouse gases in the atmosphere. This can be through avoided emissions or via direct removal of greenhouse gases from our atmosphere and can be achieved through a myriad of ways, including planting trees and even turning CO2 into rocks.[3]

The main incentive of the offsets is to put a monetary value on the removal of carbon dioxide from the atmosphere. For each tonne removed, a ‘carbon credit’ is issued. This credit can then be ‘retired’, allowing the holder to claim the underlying reduction towards their greenhouse gas reduction goals.[4]

Put simply, individuals, governments, and anyone in-between can use offsets to account for their polluting activities and can mitigate them, through the use of carbon credits. Done properly, this will lead to a transparent system by which organisations can hold themselves to account when meeting their emissions targets. However, it is important to note —reducing emissions should always be the core aim, offsets should not be viewed as a long-term solution which can replace cutting out the emissions we cause in the first place.

Placards at a protest in San Francisco. Photo by Li-An Lim.

Types of Carbon Offset

Within the compliance and voluntary markets, the two main types of offsets existing are those relating to carbon reductions and those relating to carbon removals/sequestration. There are nature-based and tech-driven solutions under the reduction and removals branches, each with its nuances. Which are the ‘best’ offsets? That is highly debatable and case-specific. However, across the entire space, there are some key areas for innovation which would push things forwards.

Innovations We’d Like to See in the Carbon Offsetting Space

  • Comprehensive, unified frameworks for verification of voluntary offsets — it is crucial that offsets can be trusted and held to the same quality standards globally.
  • Increasingly data-driven approaches to quantifying the impacts of carbon offset projects on an ongoing or more regular basis — ultimately, offsets are based on the estimated amount of carbon dioxide which is removed from the atmosphere. Regulatory standards seek to ensure that these estimates are as accurate as possible, however high-frequency monitoring which makes use of new technologies will be critical to improving oversight.
  • Increased transparency in carbon credit registries, focused on the importance of retiring carbon credits to mitigate for ‘double accounting’ — carbon credits should be retired once they are issued, meaning they cannot be sold-on in future. This prevents multiple organisations claiming the climate credentials associated with a single carbon credit.
  • Stronger legal frameworks to deter poor quality projects — the nature and quality of carbon offsetting projects worldwide is hugely variable. Comprehensive, internationally enforced legal frameworks can help ensure projects meet certain minimum standards.
  • A shift towards more permanent forms of carbon-storage. This is explored in much more detail in the Oxford Offsetting Principles — forestry projects can only sequester carbon for the lifetime of the tree, thereafter, the permanence of storage is influenced by what happens with that wood once the tree dies. As new carbon removal technologies mature, more and more emphasis will be placed on how long the carbon can be locked away for.

This is by no means an exhaustive list, but sets out some key areas which are likely to see innovation in the near-to-mid term future. We are always interested in other viewpoints and would welcome open discussion on the need for innovation in the offsetting space.

As you can see, the world of offsetting is tremendously complex. In our next piece, we examine the main advantages and drawbacks of nature-based solutions to offsetting.

Written by: Connor Rutherford

Having studied for an MSc in Sustainability and Business, Connor is taking his first steps as an early-career sustainability professional at SettleUp Earth. He has a deep connection with the natural world and is an advocate of nature-based solutions.

When he’s not promoting climate change action, he is partial to getting outdoors and even lifting some weights.

References

[1] Lovell, H. and Liverman, D., 2010. Understanding carbon offset technologies. New Political Economy, 15(2), pp.255–273.

[2] Bumpus, A.G., 2011. The matter of carbon: understanding the materiality of tCO2e in carbon offsets. Antipode, 43(3), pp.612–638.

[3] Broekhoff, D., et al., 2019. Securing Climate Benefit: A Guide to Using Carbon Offsets. Stockholm Environment Institute & Greenhouse Gas Management Institute.

[4] Kollmuss, A., et al., 2010. Handbook of carbon offset programs: trading systems, funds, protocols and standards. Routledge.

[5] Mckinsey & Company. 2021. A blueprint for scaling voluntary carbon markets to meet the climate challenge.

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