Carbon Offsets: Don't Let Perfect be the Enemy of Good
Carbon markets aren't perfect but they're essential
April 4, 2023
If you’re a casual observer of carbon markets and carbon offsets, you have probably heard A LOT of conflicting information over the past few years, most of it negative. Whether it is an article in The Guardian taking shots at rainforest projects on Verra, Greenpeace calling all carbon offsets “pure greenwash”, or reports from CarbonPlan about the questioning of the accounting of forest-based carbon offsets in the California carbon market, the news has not been great.
If most of that last sentence went over your head, that’s okay, but I bet you feel like you can’t trust offsets. And I don’t blame you. With a background in reforestation offset project development, it often felt like my business partner and I were carrying the metaphorical weight of the entire carbon market on our backs. Everyone thought an offset was planting baby trees and most offsets were something very different because there wasn't much money in doing the really impactful stuff.
That, I think, is the core of the problem. The public was so disinterested in climate for so long, that there was little pressure on economic or political systems to act meaningfully, and that suppressed the demand and inherent price of offsets as a result. For those that remained in the offset field during this time – from roughly 2010 through 2020 – they were lean times that created pressure to make offset projects viable. I don’t say this as a defense or rationale, but just to acknowledge that there was real pressure for registries to help project developers demonstrate profitability. That needs to tighten up a lot as we move forward. I would also state that while there is a lot of improvement that needs to happen in carbon offset project development, much of the criticism in The Guardian and from Greenpeace has a heavy slant to it or, worse, is occasionally just factually incorrect.
Now that prices have risen significantly and continue to trend upwards due to rapidly expanding demand, many players in the market are working to correct the inherent errors in the space. This is especially important as there is a rush to market from some who are not particularly interested in their environmental outcomes as much as the potential for profit and many, many others who are unfamiliar with the history of the markets or why certain things should be done certain ways.
One organization trying to clean up carbon markets is the Integrity Council for Voluntary Carbon Markets (ICVCM). To some fanfare, they released last week their framework around Core Carbon Principles, with their CCP acronym unfortunately shared with the Chinese Communist Party. Though some were excited about the release, for most of the industry it landed with a thud. Effectively, the ICVCM had repackaged what carbon offset registries had long stated the point of offsets were. The 10 CCPs were obvious to anyone that knew anything about it and they kind of phoned in their work, not even getting their main graphic correct.
There are other organizations that are doing work here. Instead of taking a market-wide approach, these companies are looking to become the umpire for the validity of any individual project. I have friends like Saif Bhatti at Renoster and Donna Lee at Calyx Global that review an offset project and where their companies provide their own assessment of the validity of each offset produced. I think that this is the right approach, but there is disagreement between these organizations and others like them about how to score each project, so there is going to be a shakeout in who is the arbiter and what is the correct accounting.
You might feel even more confused now than before and leaning towards the idea that maybe carbon markets are irredeemable and we should just focus on reducing emissions. You’d be half-right. We do need to focus on emissions reductions. Big time. But we also need carbon markets. And you don’t have to take my word for it.
Start with the excellent work that is being done by Project Drawdown. These folks have put together the pathway for our climate future. And it is one that doesn’t rely upon any techno-optimism, but on solutions that are available to us right now. They heavily prioritize emissions reductions, as should we all. But they also show that there are big requirements for changes to how we engage with natural and working landscapes. And short of regulation that covers every place on Earth, there will have to be some market-based structures to incentivize those behavioral changes. That doesn’t have to be exclusively carbon markets – there are a lot of structures to help – but it probably can’t escape their necessity.
You can also follow the work of Climate Interactive, an adjunct organization of MIT that was founded in 2005 by Dr. Elizabeth Swain and Andrew Jones. Climate Interactive built an awesome simulator called En-ROADS that allows people to pull the various levers they think necessary to achieve our climate future. I’d encourage you to give it a try. You’ll learn many things and challenge your assumptions, but a couple of notes:
As John Sterman, a senior advisor on the project, says, “There are no silver bullets, but there is silver buckshot.” Whatever your pet climate solution is, it probably is part of our climate future, but it isn’t the only thing. Not by a long shot. We have to do all the things.
Paying a price for climate emissions, such as with carbon offsets, are essential to our climate future. There’s no pathway without them. Importantly, they’re also one of the most important keys to our future.
So carbon markets need to work. And they’re improving but not there yet. And they’re essential to our future. What do you do with that if you’re not a market expert? Here’s what I’d recommend:
Focus on reducing your emissions in a measurable and real way. If you can prove that you’re doing the hard work, you won’t expose yourself to claims of greenwashing, at a minimum. Aclymate would be a great tool to start with, but there are others if we're not the right fit.
If you can find information on project validity from organizations like Calyx or Renoster, you should, but even in their absence, know that there are co-benefits to the projects you support, there is value to creating an internal price of carbon for your operations, and you should take pride in doing your part when so many do not.
Vote for carbon markets. Carbon markets are going to get better, but they’d get better faster and more effectively if there was a national policy on the voluntary market or, better yet, a national regulated market.
Finally, don’t let perfect be the enemy of good. And because every climate decision and everyday matters, do not delay awaiting a perfect solution. Do your best and move forward, because you’re going to get better at this, too, and it can’t wait.