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We were frustrated that every time we spoke to people who wanted to act on climate, we ended up having to educate them on all the complexities of carbon markets and climate change. That as sustainability professionals at large companies created the tools for dealing with their problems, they were creating a system and a language that was inaccessible to the layperson. We decided it could be done differently. We want to make powerful climate action available to everyone.
One of the first things that most people decide to do is buy carbon offsets. They often don’t know why, just that it feels like the right thing to do. As someone who developed the largest carbon reforestation project in US history, I’ll be the first to tell you that offsets are important. There is no path to our climate future without continuing to develop high-quality, carbon offset projects.
But to be clear, the first and most important priority in any company’s climate action plan is to reduce emissions first. We cannot offset our way out of the problem, based upon the limits of physics and biology. Offsets will only be part of the solution, which is why we’ve made our climate accounting and analytics tools free to everyone. We believe that you have the right to know what your footprint is.
The other problem with offsetting is that it leaves a company concerned about the legitimacy of the offsets that it is purchasing. There are a lot of reasons to be worried, as we hear increasing stories of why one offset project or another doesn’t add up to what it claims to be. In part, these stories are correct, but they’re missing the bigger picture — the most responsible companies offset in addition to having an emissions reduction plan. You don’t need to be that worried about offsets coming back to bite you if you’re already doing the hard work.
So do the hard work. But also, offset what you can’t yet eliminate. Because offset projects have some really amazing secondary benefits in addition to their climate outcomes, and as a whole, you can be proud of what you have helped create.
Now, let me tell you what you need to know about carbon offsets
The Earth is warming due to a variety of gases we release into the atmosphere known as “Greenhouse Gases” or GHGs. The most common and having the greatest impact is carbon dioxide (CO2). The other gases include methane (aka natural gas), nitrous oxide, and a variety of industrial gases. As they’re less common, their affect upon the climate is converted into an equivalent of carbon dioxide or CO2e. The standard unit of measure in climate is in metric tons of CO2e, usually written as tCO2e or sometimes as MTCO2e. That can be a lot, so typically people refer to it as a ton of carbon for short. So when you hear about carbon credits, they’re talking about buying or selling some multiple of tCO2e. At Aclymate, we think that’s a fine unit for the big guys, but for most of us, we need to measure our impact in units more suited to the average person, so we display things in pounds of CO2.
An offset is a way to pay to someone else to reduce the amount of carbon in the atmosphere. The idea is that what might be currently too expensive for you to achieve might be cheaper for someone else to do. Offsets generally fall into two categories: emissions reductions and carbon removals.
Emission reduction projects are when you pay someone else to reduce their emissions. These are projects that have met some minimum standards of additionality that without additional finance would not have been feasible for development. Some examples:
Carbon removal projects are when you pay someone else to capture carbon from the atmosphere. As this is a more intellectually pure argument — you make a mess and pay someone else to clean it up — removals are increasingly in demand, which of course affects the price. There is some change in the language in the market, where removals are seen as distinct from offsets, but that isn’t yet a standard. Carbon removals come in two flavors: nature-based and tech-enabled. Nature-based removals are projects that increase the capacity of natural and working lands to increase their capture and storage through photosynthesis — locking carbon up in the bodies of plants and the soil they live in. Tech-enabled removals try to capture carbon dioxide with machines or other manufactured processes. Some examples:
There are a few players in the offset market:
Offset Registries: These are typically non-profit organizations that create the marketplace. They have a process for identifying different offset project types, creating a standard methodology for measuring the projects ability to reduce emissions and/or remove atmospheric carbon, and running it through a scientific review process for legitimacy. Once a methodology is approved, offset project developers can use it to create offset projects, for which the registry will issue offsets to the developer as proscribed by the methodology. An issued offset can then be sold and traded as an asset until it is consumed, at which time it is permanently retired. The registry maintains track of the offset from its creation until its retirement. Reputable registries include Climate Action Reserve, Gold Standard, Verra, American Carbon Registry, and more. New registries like Nori and NCX are emerging by creating improved practices in remote project monitoring and offset tracking and issuance, but are still working to establish broader market credibility due to their size and shorter track record.
Project Developers: The people and organizations who do the work of finding, financing, and developing offset projects. A particularly specialized field of work, it requires the ability to speak to financiers, land owners, registries, auditors, and more. In many ways, these people are building our climate future.
Verification Bodies: Every reputable registry requires that offset project developers not only adhere to the methodology they choose to develop a project, but that their projects go through an independent audit or verification by an accredited third-party. These verification bodies check the paperwork and processes to guarantee that high standards of authenticity are being upheld.
Brokers / Retailers: Project developers frequently lack the connections to the large corporations to sell their offset volumes. Intermediaries would facilitate these transactions for a fraction of the sale. This market favored bundling multiple offset projects into a single sale for very large corporate buyers. This is part of the space that Aclymate occupies because we think that small companies should not only have access to these projects, too, but that instead of bundling projects into one sale, we can help to bundle multiple buyers into increasing their purchasing power.
Offset Buyers: Historically, offset buyers have been very large corporations with teams of sustainability professionals. They have been doing really important work in supporting and directing the carbon markets, but there’s a big risk that these large buyers are going to block the ability of smaller businesses to make meaningful action. Aclymate is here to democratize carbon market access.
If you’re a small business in the United States, there isn’t yet a regulation requiring you to offset your emissions, so offsetting is part of a story you’re telling a key stakeholder. For some, that stakeholder are your current or prospective employees. For others, its about demonstrating ESG directionality to investors and clients. Or it might be around demonstrating action to customers. Or perhaps its just about an ethos of the management. Deciding about the right offset means telling the right story to the right people. Make sure you know what they’re looking for.
The characteristics of the right project often include some mix of the following:
Project Location: Companies generally like to demonstrate to their employees and customers that they’re good members of the community. Offset projects that these stakeholders can potentially visit or benefit from often are a priority.
Co-benefits: Some companies have particular impacts on the environment beyond climate, so being able to tell a story about water, habitat, outdoor recreation, and rural or urban development can be an important attribute to these companies.
Environmental Justice: There is clear evidence that the burden of development falls disproportionately upon the poor, the disposed, people of color, and the developing world. Investing in projects that help these communities can be part of a restorative investment in justice.
Project Type: To be blunt, some projects just have a better feel-good story. Though destruction of certain industrial gases is incredibly important to our climate future, the pictures and story associated with planting trees is just an easier sell.
Removals vs. Emissions Reductions: Our future increasingly will depend upon the banning of high-consequence emissions. Investing in those projects now can help build that future.
Offset projects are hard to develop and the perfect project might not yet exist. Or, if it does, its supply may already be spoken for. You can spend a lot of time looking for that perfect project, but you probably won’t find it, there’s a good chance you won’t do anything as a result, and the time you wasted could have been spent doing something more productive like finding ways to reduce your emissions. At Aclymate, we bring you a lot of offset projects — more than anywhere else — so you can spend your time doing things that matter.
If you’re ready to begin your climate journey, please sign up for a 33-day free trial or click here to learn more. Our team of climate navigators is here to help you find the course to the outcome you want and the community you need at a time and price that will surprise you.