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How Can We Make Carbon Offsets Better?

By Christopher Córdova - Victoria Ecosystems
CEO & Co-Founder

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By Christopher Córdova | Co-Founder and CEO - Mon, 10/24/2022 - 09:00

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If you have not yet watched John Oliver’s criticism of the current carbon offset situation, go ahead and open the YouTube link while you keep reading: it is an extremely funny and terribly accurate criticism of why some of the current carbon offset methodologies are simply not getting us faster toward climate stability and, in some cases, might actually be slowing us down. 

In a nutshell, carbon offsets are a compensation for CO2 emissions: a company releases CO2 to the atmosphere because of its production process, then a certified project does something elsewhere to compensate for those emissions. 

Now, why is this important? It sounds like a niche conversation, a technical discussion that does not affect other industries. The thing is, it affects all industries as we speak, and will do so at a monumental scale in the future.  

Here are the three main concerns mentioned by Oliver in his video (trust me, watch it), and below each of them, my analysis:

1. Under some systems, it is actually possible to plant a tiny tree (today basically a plant) and sell as offset all the CO2 that that tree will help capture over the next 20 or 30 years. 

Now, who can guarantee that a tree planted in the wild will live 30 days after it has been planted? Then, who can guarantee that it will live 30 years? The truth is: no one. 

Don’t get me wrong, I created my first tree-planting campaign when I was 8 years old. I am definitely bullish on tree planting. But I am certain that we need to protect current mature ecosystems on a much greater scale as well, and also restore ecosystems and do other things that, yes, are less sexy than newly planted trees but are more effective in capturing CO2 in the short term (the CO2 emitted this year is right here, while the CO2 to be captured in 30 years, well, is still theory). 

2. This means that we are actually compensating current CO2 emissions with (possible) future results. 

Offsetting the present with the future is not how our economy works, nor how our economy works in relation with nature: 

Our economy works like this: this year, there are earnings, this year, there are expenses, then there is a balance that needs to be covered somehow this year (be it from eating financial capital or getting additional financing through debt). Humanity’s economic dependence on nature works like this: this year, resources are renewed naturally (clean air, clean water, biodiversity, etc.), this year, resources are used by humans, then there is a balance that needs to be covered this year (be it from eating away at the world’s natural capital or … wait, there is no other option until we can import some fresh air, clean water, and biodiversity from other planets, which I am not entirely certain we want to do at all given what Hollywood has taught us all about what happens when biodiversity is imported from other planets). 

So why would we allow emissions that occur this year to be compensated with offset that will occur in future years? It makes no sense at all by any financial, economic, accounting or administrative standard, and what is more, it is extremely dangerous for climate stability. It simply drives us away from sustainability.

What does sustainability mean? According to Gold Darr, it means sustaining our current normal. For example, taking into account natural resources: Earth Overshoot Day signals the day of the year in which humanity has used all the resources the planet regenerates in a year. The truth is, if we were sustainable, that day would never come before Dec. 31. So we are eating away the planet’s natural capital. Less capital means less interest, so less natural capital means less resource regeneration capacity. 

But nature does offset carbon (it has literally been doing that for millions of years pretty well), so what did we get wrong with current carbon offsets? The concept of additionality (immensely popular among offset providers) has some very problematic implications. Additionality in offsets basically means that offset actions should not focus on monitoring and regenerating nature that exists today, or that already has a certain degree of formal protection (for example a large jungle that has been declared on paper a protected area), but should instead focus on doing new things (yes, including planting more trees, which some projects have taken as the easy, fast way to sell cheap offsets to companies, and this has been tolerated by some standards and certifiers over the years).

The thing is, small trees planted this year will not take away enough CO2 to compensate for this year’s world emissions. The disparity between emissions and compensation then is enormous. 

As a side note, there are indeed many areas protected on paper that are not protected in reality. Illegal exploitation of resources in officially protected areas is terribly common in many countries and little data is available on the risks those ecosystems face. What is more, sustainability must translate into sustaining with compensations occurring this year for all the CO2 emissions launched into the atmosphere this year, and perhaps the whole concept of additionality should be updated to reflect the complex reality we live in.

3. Where is the data? Where can we verify the information behind the claims that carbon offset projects and certifiers make?

Currently that information is in long technical and institutional PDF reports that are not accessible or intelligible to most people (me included). Imagine a satellite image of a forest with a resolution of 20m per pixel (20m x 20m), imagine the whole image reduced to a few centimeters in a PDF document: the result is practically abstract art, not detailed data that can prove the state of conservation of that forest. 

When compared with any other industry, the offset industry collects relatively little data and decisions are taken on relatively little data. Carbon offsets should be the crown jewel of transparency and open data best practices, and they are not. At least not yet.

What would be the right way to address these challenges?

First, emulating any other area of human economic activity: a year’s emissions are compensated with that same year’s offsets.

Second, open data. Open data offsets will take us faster to sustainability and allow us all to see the same images and watch the same videos of the same forest at the same time, which means we will have a common ground and not just a second-hand account of the health of that forest. If it were up to me, in an ideal world, I would rather trust the data than the certifiers. And in that same ideal world, carbon accounting emulates financial accounting: what happens this year needs to be balanced this year. It is simpler, nicer, more transparent, and most of all, driving us faster toward sustainability and away from the dangers of greenwashing (greenwashing is like pretending to take that medicine you actually need). 

The market is ready for more transparency in our efforts to protect the planet.  

Photo by:   Christopher Córdova

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