What are carbon offsets? Carbon offsets are programs or initiatives that implement a “measurable avoidance or reduction of carbon or other greenhouse gasses. They work in one of two ways; one being slightly more straight-forward than the other. Consumers can support a carbon offset directly by themselves, this means that you give money to an organization that works with people somewhere in the world and their job is planting a number of trees, based on the amounts of donations they get, for instance. That sounds simple enough, right? The other, not so much. The other method is what is typically used by companies and brands, this carbon offsetting is a lot less simple and works almost like the real estate market. There is a buyer (usually a company), then there is a broker, they will sell carbon offsets on behalf of other companies, or other brokers.
Generally, this carbon offsetting can be divided into four categories.
- Biological reserves, in which new trees are planted, or older trees are cared for, and the CO2 those trees absorb while under the protection of the program is the product that is then used for offsetting // an example: Air France made a campaign where they offered carbon offsetting for passengers’ flight. For an additional price, you can then “fly green” because the company will use that money to purchase trees or the carbon offset they produce.
- Renewable energy projects, where investments go towards funding energy sources that do not emit carbon – the calculated carbon saved is then sold as the product for carbon offsetting // An example: a carbon offsetting project donate solar panels to a community that would otherwise be dependent on fossil fuels for energy.
- Energy efficiency, which involves improving and developing construction, buildings, and electronics in a sustainable and energy-efficient way // an example: a company that manufactures kitchen appliances came up with an oven that only needs a small number of wood pellets to work, they donated 1000 of these ovens to people in the Andes, who normally use wood for heating and cooking – and the trees that these 1000 ovens saved were sold to other companies as carbon offsets
- Reduction of non-CO2 emissions, from specific sources // these are projects that look at other greenhouse gasses like methane and fund projects with industries to reduce these emissions.
Carbon offsets are often offered to customers as compensation for a purchase or service, or used by the company themselves to compensate for their own emissions. Carbon offsets have many different faces, and the words “carbon offset” or “carbon neutral” can mean vastly different things. The green trend of carbon offsetting for a consumer’s purchase or service has very quickly become a huge industry and naturally, it has got a lot of people wondering if it matters at all. I would like to dive into some of the issues with the industry, some of the advantages, where it often goes wrong, and what you as a consumer should know about carbon offsetting, so let’s do this.
Does it work? It can work, this is the most diplomatic way of expressing that I feel like, but there are many, MA-NY grey areas, that I think we should go over. First of all, planting a tree is always a good deed – an average tree absorbs about 1 ton of CO2 in its lifetime, and with deforestation, intense agriculture, and wildfires, we need to keep trees safe, by protecting the ones we have and by planting new ones. However, many companies will mislead consumers into thinking that their services and products can be compensated for instantly because a tree is planted but it can take years for a tree to grow to a size that will have a measurable effect and this leads me to the first issue I want to talk about –
Communication – Carbon offsets are extremely complicated arrangements, however, they are advertised watered down and simplified to the consumer and this provides us with an unclear and incorrect picture of what we are actually supporting. If the carbon offsets are purchased by a company through a broker or several brokers, it can become almost impossible to find out where the carbon offsetting is actually taking place. As a result, carbon offsetting becomes hard to navigate and thus used as a tool of marketing rather than something that inspires actual change. Some companies purchase carbon offsets and then promote their business as carbon neutral, as the purchased offsets are equal to their own emissions, however to consumers “going carbon neutral” can easily be misunderstood. When we hear about someone “going carbon neutral” we often think that they did something to improve their own footprint and their own products – not that they bought carbon offsets elsewhere. And while the claim of “going carbon neutral” is technically not untrue, the connotations of the statement are different from the reality of the actions and thus, a misleading marketing tool.
An example // Some airlines are promoting some routes as “carbon neutral” because they are buying carbon offsets equal to the emissions from said flight, this is technically being carbon neutral. However, the Google headquarters is exclusively powered by renewable energy sources, solar panels on the roof among others, and thus are also carbon neutral. Both these companies get to call themselves carbon-neutral, while one did not change their own product, but bought offsets, while the other actually changed their own power plan to a more sustainable option – see how it can be misleading? More like carbon upsetting, am I right?
Is it wrong to advertise green actions? No, it is technically fine, but there is also a fine line, which is easily crossed into greenwashing, and this happens when extremely complex carbon offset arrangements are simplified or dumbed down to sound more appealing, or more efficient than they are. The green marketing guidelines state that a claim is misleading or greenwashing if the average consumer can interpret said claim in an inaccurate fashion, and here I have an interesting study I think we should look at. “In a recent study of 356 Australian consumers and 352 US consumers, it was found that on an eight-question knowledge test about environmental issues, 77% of Australian consumers and 72% of US consumers could be considered to have high levels of environmental knowledge. However, when asked about carbon offsets, only 37% of Australian consumers and 40% of US consumers could be classified as high knowledge. Thus, there was a significantly lower level of carbon offset knowledge which might mean these consumers would be unlikely to interpret claims about carbon correctly” (Landreth-Grau, Polonsky and Ganna, 20(9)
How is it used? I want to talk about a few examples of companies’ carbon offsets because this is where it gets really interesting. In January 2020 Air France introduced a plan to carbon offset their 450 daily flights by funding projects that “plant trees and protect forests” and while this is a great first step, it often stands alone and becomes a green alibi. The carbon offsetting does not take the manufacturing on the planes into account and it does not inspire innovation either. I think it is not unimportant to note that a lot of the bigger companies that invest in carbon offsets are inherently unsustainable: British Airways and EasyJet are other airlines who have followed suit. Petrol companies and dairy companies as well (ahaha lol) are choosing “solutions based on nature”. Shell wants to plant 5 million trees in 2020. With more and more companies turning to carbon offsetting, the industry is growing, and growing fast. The CEO of EcoAct, a carbon offsetting company utilized by EasyJet and Air France, among others states: “Since October 2019, approaches from airlines, tour operators, insurance companies and banks have been rising, whether it’s about carbon footprint, reducing emissions, or carbon offsetting.” EcoAct, which has offices in Paris, New York, London and Turkey, predicts significant growth in its revenue (22 million euros in 2019) this year. Other clients of theirs include cruise ships, coal companies, formula 1 bosses, banks, and dairy companies. It does not seem like a coincidence that many carbon offset brokers are approached by these types of industries aka the industries that are continuously receiving more and more criticism and boycotts. They are desperately looking for ways to improve their image.
But isn’t better than doing nothing? Well of course it is better than absolutely nothing, everything else is. But out of the four categories of carbon offsetting the majority of these companies are opting for the tree planting – a process which is often presented as an instant green action, when in fact it can take years, and in 2018, there were twice as many projects linked to forests and land management as renewable energy. And investing in green energy solutions might actually be a better option, but as a marketing tool, consumers generally react better to tree planting, even though it is not always the most sustainable choice of the four. A European study from 2016 also showed that 85% of offset projects they looked into, promoted their efforts before funding any projects, this brings me to my next point:
Why are carbon offset projects so easy to use in greenwashed marketing? Well, maybe because they are voluntary green actions. Companies do not have to do anything, in theory, but the carbon offsetting industry has quickly become a green alibi for many companies because it is not very strictly regulated, and that creates the perfect conditions for greenwashing. There are also a lot of people who are growing their wealth through this industry. Brokers, who sell carbon offsets from one client to another are making a lot of money in the process. Because there are no regulations to speak of, the profit margin of carbon offsets can be extremely high. To control the brokers’ profit margin, ClimateSeed is seeking to establish a fixed margin of 15% in the industry, to make sure that no one is playing the carbon offsetting scheme for personal profit – which indeed is already happening. Plant tree campaigns and carbon offsetting is also removing the focus from the companies completely, or indeed shifting it. Instead of looking at the companies’ contribution to emissions and climate change, we celebrate them for the bare minimum, which is simply not a vibe. It is also very “award us for undoing a tiny fraction of the damage we are continuously causing” yeehaw..Several experts also express concerns about carbon offsetting and “tree-planting schemes” as a trend, because it takes the focus away from the fact that we need to reduce emissions across all parts of our economy, and simply carbon offsetting does not eliminate emissions, it often shifts them.
Due to the under-regulated field, companies can make these simplified claims like” buy one – plant one tree” where the primary goal is certainly not to plant trees, but more so, to make consumers purchase their product, and studies show that we are much more likely to buy something if we think we are also doing a good deed, however, we aren’t necessarily. These campaigns do not take into account that trees can take decades to remove significant emissions. They also do not take into account that planting trees is actually labour and simply costs more than what they are advertising. Thus, the “plant a tree for a dollar” campaigns always has me wondering, how many trees they actually end up planting, because they certainly cannot do it for a dollar. Rather than creating these campaigns, which are often easy fixes that shifts our focus from the companies’ contribution to their “solution” to climate change, we should demand them to pay locals to preserve forests, pay them actual wages, encourage natural regeneration and invest in developing agroforestry, rather than simply planting trees. What I cannot help but think is that planting trees for sustainability is the same as recycling. It’s a great place to start, but a seriously ineffective place to stop.
How do we avoid greenwashing? Not all companies’ efforts are equally greenwashing, some are actually quite decent, but no matter what, the fact that a company is carbon offsetting must never be used as an excuse to overconsume, ever. There are also certain certifications in place, and they try to create a high standard in the industry, one of which is The Golden Standard for voluntary offsetting, then there is Clean Development Mechanism, B-Corporation, and Quality Assurance, and others. Here are some of the projects and carbon offsetters that do better:
- Carbon Offsets to Alleviate Poverty
- Cool Effect
- Sustainable Travel International
Conclusion: I asked you guys on Instagram if you had any questions about carbon offsetting, and you really came through, I can tell that it is a topic that confuses a lot of people, and clearly, maybe companies prefer it that way as well. If you want to know which carbon offsetting projects that are legit and which ones that are not, look for certificates, look for results, and look for the profile of people that are working with the project. Sometimes, you cannot find any project results, no certificates, and only odd buzz words, stay away from those. Look at the entire company, not just their carbon offsetting – the ones who are legit ambitious regarding green actions will have taken steps other than carbon offsetting, and it is that big picture we want to see. In conclusion, carbon offsetting is often used as a green alibi, but it can actually do some good – if it is paired with other actions to go with it. It is hard to navigate green marketing, but knowing what these words and phrases mean like, “carbon neutral” will make it so much easier to understand what companies are trying to tell us – or trying to sell us. Planting a tree will never compensate for unnecessary products and overconsumption, but in cases where you have to buy something, or you have to transport yourself somewhere, carbon offsetting is a great idea to begin with.