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Is it better to pay more or to pay less? It’s hard to say. The truth is that you cannot know at the time of purchase whether your investment will reap an environmental dividend, since most offset projects only deliver returns over many decades. You are effectively buying offset futures.

“Is it better to pay more or less for offsets? It’s hard to say”

Take tree plantations, which account for most of the voluntary offset money spent so far, greening an estimated 4 million hectares. Brisbane’s F1-11 released its emissions in less than a second, but the trees planted to offset it will reabsorb CO2 only gradually, over about three decades – if all goes well. And it may not go well. All around Brisbane at that time, trees were dying in Australia’s worst drought in 1000 years. It is anyone’s guess whether the offset trees will fare better.

The uncertainty over tree planting was dramatically highlighted when rock group Coldplay vowed to offset emissions from the production of their 2002 album A Rush of Blood to the Head. They paid for 10,000 mango trees to be planted in India. Accounts differ, but something went badly wrong and around 4000 of the trees died.

Even successful tree projects do not live forever. Eventually they die, rot and yield up their carbon. Read the small print and offset companies mostly promise to maintain their forests for 99 years. There is a certain logic to this. It is roughly equivalent to the amount of time an average molecule of CO2 released into the air will last before it is reabsorbed by nature. The result of the offset, then, is not to negate the emission so much as time-shift it. Rather than hanging round in the atmosphere through this century, that tonne of offset CO2 will instead inhabit the next.

This is problematic. It is just possible that by the 22nd century the concentration of CO2 in the atmosphere will be lower than today, in which case this time-shift will have been useful. More likely the offset CO2 will be released back into an atmosphere already choked with the gas, giving an extra push to global warming. Future generations may not thank us for our forest offsets.

Making matters worse

There are other concerns about forest schemes. They may dry out soils or release methane, negating the gains from stored CO2. Outside the tropics, dark forest canopy often absorbs more heat than the growing timber can offset and so in fact exacerbates global warming. Large forest projects also have a nasty habit of creating social conflict by turfing poor people off their land.

It is perhaps no wonder that most offset companies are now getting out of the trees business. Whatever the theoretical benefits of tree planting, they say, the burdens of long-term monitoring and verification, and the potential for disputes, are just too great.

So what are the alternatives? For most offset companies, plan B is to invest in green energy projects such as wind turbines, solar panels, and energy-efficient light bulbs and cooking stoves. “Funding energy projects is intuitively better [than forests] because it stops pollution, rather than soaking it up later, and you are contributing to a wider move away from fossil fuels,” says Mike Buick of Climate Care.

However, these projects raise their own set of dilemmas. Most critical is the question of “additionality“. In other words, has the project really added something to what would have happened anyway? If so, how much?

Many countries are already reducing their reliance on fossil fuels and adopting energy efficiency as a matter of course, so offsetters have to demonstrate that what they are doing is additional to that. If they are installing solar panels in an Indian village, say, they need to show that this would not have happened without their intervention. They also have to produce a plausible calculation showing how much wood or fossil fuel the villagers would have burned without the panels.

The trouble is that nobody can be sure about the future. Even apparently copper-bottomed additionality can spring a leak. In 2005, for example, Climate Care funded the distribution of free energy-efficient light bulbs in a slum in Cape Town, South Africa, and sold the offset emissions. Yet a few months later, power company Eskom responded to blackouts with an energy-saving programme that involved distributing similar bulbs in the same township.

Disagreements over additionality underlie most disputes about the quality of offsets,” says Trexler. So it’s no wonder that a consortium of environmental groups, including WWF, has now set up a certification scheme called the Gold Standard, which aims to verify claims of additionality. But while it has made inroads in the official Kyoto sector, a simplified version for the voluntary sector has not yet attracted many applicants.

One sensible test applied by the Gold Standard is to ask if the offset project makes economic sense in its own right, regardless of environmental benefits. If not, then the chances are it would not have happened, and therefore qualifies as additional. But this means that the projects where it is easiest to demonstrate additionality are also the most expensive, and so probably the least cost-effective: fewer tonnes of CO2 will be saved for every dollar spent.

An alternative approach is to find cost-effective projects that are stuck on the starting blocks for want of capital. Climate Care funds many such small-scale energy projects among poor communities in developing countries. “If the people don’t have capital and you can put it in, then additionality is clear,” says Buick, citing in particular spending on cleaner-burning cooking stoves in India.

Yet even these schemes are controversial. Many governments in the developing world worry about the probity of letting rich nations carrying out carbon offsetting in their countries – they call it CO2lonialism. One day soon, countries like India, China and Brazil will probably have to accept their own limits on emissions. At that point, they may discover that the easiest, cheapest offset options have already been used up by western companies.

For that reason and others, many offsetters want to fund projects closer to home. Here the logic of additionality becomes even more difficult. The question is: can you claim additionality if you offset in countries that are already legally bound to reduce emissions under the Kyoto protocol? You would think not, yet many offsetters do precisely that. CarbonNeutral, for instance, has forestry projects in the UK and Germany and funds a wind farm in New Zealand. CO2 Balance, based in Somerset, UK, buys land in the UK and France on which to plant trees. The Woodland Trust also funds tree planting in the UK by selling offsets. The danger in this is that governments with Kyoto obligations will claim these voluntary offsets as part of their official efforts to reduce emissions, so that the voluntary sector ends up doing the work of the official one using private money that was invested in good faith.

That’s not to suggest that these projects are illegitimate or deceitful. The Kyoto protocol includes a mechanism called joint implementation, which allows Kyoto countries to invest in others’ offset projects. Even so, it’s difficult to guarantee additionality in such schemes. To avoid confusion, some offsetters do not fund projects in countries with legally binding Kyoto targets. Climate Care for one has called on governments with Kyoto targets not to count voluntary offset projects as part of their compliance activity.

What does seem fair criticism is that efforts to portray offsets as simple, quick fixes pose serious questions of both commercial and ecological legitimacy. Sceptics argue there is no substitute for cutting emissions. For them, “dump, burn and offset” is the worst possible outcome. In February a radical group called London Rising Tide occupied the office of CarbonNeutral, accusing the company of creating a “smokescreen” behind which corporations will be able to keep increasing emissions. That is a political judgement rather than a scientific one – as far as the climate is concerned, a tonne of CO2 pulled out of the atmosphere is as good as a tonne of CO2 that never entered it – but the group still has a point. Buying an offset implies a degree of certainty that we do not have.

At the very least there is an urgent need for regulation so that – as British environment secretary David Miliband put it when announcing plans for oversight of voluntary offsets – “people can be sure that the way they offset is actually making a difference.

New Scientist Magazine. Issue 2594, March 9th, 2007.

Fred Pearce

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