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Carbon offsetting is a carbon trading mechanism that allows entities to compensate for their residual carbon emissions by investing in projects that reduce, avoid, or remove emissions elsewhere. While this approach can contribute to climate goals, it often faces criticism for potentially allowing companies to sidestep substantial decarbonization efforts. Additionally, verifying the benefits of offsets is a significant challenge and some projects may promise more than they can deliver.
In this episode, James and Daisy chat about the complexities of carbon offsets and carbon markets. What are the differences between the voluntary and compliance carbon markets? Is offsetting better than doing nothing? Is the word “offset” inherently problematic?
SOME RECOMMENDATIONS:
- Five Times Faster – a book by Simon Sharpe, where he argues that “in our fight to avoid dangerous climate change, science is pulling its punches, diplomacy is picking the wrong battles, and economics has been fighting for the other side.”
- ISSD (2023) – We loved this article by Scott Vaughan and Charles Di Leva on international carbon markets.
- International Journal of Sustainable Energy (2023) – James contributed to this methodology alongside Daniel Morrell and Felix Dodds. It presents the “Balance” approach to sustainable development and describes two novel measures: a carbon calculator for commercial entities, and a new metric, the Balance Unit, combining biodiversity creation with carbon credits.
OTHER ADVOCATES, FACTS, AND RESOURCES:
- SBTi (2024): If you’re interested in joining the debate on offsets, it is worth reading this synthesis report on carbon credits and following updates from the SBTi.
- BloombergNEF (2022): “…[compliance] markets reached a value of more than $850 billion in 2021 and cover close to a fifth of global greenhouse gas emissions.” “Despite the hype of voluntary carbon markets, they are still very small compared to compliance markets, valued at around $1 billion to $2 billion in 2021.”
- Deloitte (2023): “There are now 36 “compliance carbon markets” that offer cap-and-trade programs for heavy polluters.”
- Bioregional (2024): Read this blog to understand a bit more about carbon insetting – “…carbon insetting supports emissions reductions within an organisation’s own value chain.”
- World Bank Group (2022): This article provides a clear explanation of Article 6 of the Paris Agreement – “Article 6 of the Paris Agreement allows countries to voluntarily cooperate with each other to achieve emission reduction targets set out in their NDCs.”
- Pollination (2023): Delta Blue Carbon is a project in Pakistan that is restoring critical mangrove habitat, creating a large carbon market that is genuinely nature-positive, and offering the local community tangible benefits and a starring role in the restoration and stewardship of their environment.
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Music: “Just Because Some Bad Wind Blows” by Nick Nuttall, Reptiphon Records. Available at https://nicknuttallmusic.bandcamp.com/album/just-because-some-bad-wind-blows-3
Producer: Podshop Studios
Huge thanks to Siobhán Foster, a vital member of the team offering design advice, critical review and organisation that we depend upon.
Stay tuned for more insightful discussions on navigating the transition away from fossil fuels to a sustainable future.
