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What is Carbon Offsetting and is it a viable strategy towards reaching Net Zero?

Carbon offsetting it a form of environmental management which aims to mitigate the effects of pollution of a certain sector or activity by funding ecologically sustainable acts elsewhere. For example, an industry emitting greenhouse gasses might look to plant trees in South American rainforests which will in turn act as carbon ‘sinks’ and absorb the carbon the industry emits, thus offsetting its polluting effect. On an individual level, a person might donate to an environmental charity or pay for a tree to be planted each time they use an airplane, to ‘offset’ the pollution the action causes.


Traditionally, carbon offsetting was achieved through reforestation or through limiting deforestation of rainforest areas, but this has now shifted to various other sectors. For example, carbon offsetting on an individual level, also known as voluntary carbon offsetting, can allow individuals to donate to environmental charities or projects that may not otherwise receive funding. Alternatively, such donations might aid in the research and development of new climate positive or renewable technologies, thus contributing to the Net Zero Goals that are increasingly being set worldwide.

It is important to note, however, that Carbon offsetting does not come without its downsides. For example, reforestation may seem like a positive enterprise, but in actual fact it can cause various geopolitical knock-on effects for local people, and is not guaranteed to absorb the same amount of carbon dioxide annually that the polluter industry emits. In some reforestation schemes, indigenous people are forced to relocate, and their access to areas of cultural importance, foraging or shelter are minimized if not eradicated (McAfee 2016: 344). Alternatively, land that might be used for pasture or subsistence agriculture by local communities might be repurposed for carbon offsetting plantations. There is therefore some potential for businesses to create an ecologically concerned self-image, while their ‘offsetting’ actions may in fact cause issues of their own.


Furthermore, in examples of voluntary carbon offsetting, although the actions funded may result in energy reductions or work towards development of environmental technologies, they do not directly prevent or reduce carbon emissions. Additionally, quantifying how much carbon has been offset by such actions can be incredibly difficult, making it hard to validate claims about the positive effects of certain offsetting actions.



However, despite these potential drawbacks, carbon offsetting can nevertheless be read as an important strategy in the journey towards Net Zero.


In recent years, an increasing number of businesses have made pledges to work towards Net Zero, but such a target may not be easily attainable for certain businesses for various reasons, such as high transition costs. For other industries, achieving energy targets that fall within the 1.5 degrees targets of the Paris Conference (at which nations pledged to limit temperature rises to 1.5 degrees of pre-industrial levels), would require negative emissions outputs. In such scenarios, carbon offsetting plays an important role: firms have the option to buy carbon credits from other companies that do fall within their emissions targets, or to pay for offsetting actions that will have positive ecological effects elsewhere whilst allowing the firm to transition to cleaner practices at a more manageable pace.

Within the trading of carbon credits, those firms that pollute less than their targets can sell off remaining credits to firms struggling to meet their pollution goals. A positive aspect of such a scheme is that over time emissions targets are gradually lowered, which encourages firms to develop more efficient, less polluting production lines, and research into cleaner technologies. The hope is that this form of carbon trading and offsetting will drive innovation, permitting the creation of new technologies that will contribute towards the target of reaching Net Zero.


Like every policy, carbon offsetting has its downsides, but it can be seen as a helpful contribution in the chase for Net Zero, particularly through its push for innovation because in carbon trading schemes. However, governments must be cautious that offsetting is used as a genuine tool to lower emissions, and not as a means of continuing ‘business as normal’ by paying to avoid the issue of carbon emissions. Then, if managed successfully, offsetting can act as a productive strategy in the transitional phase towards Net Zero.

 

Tamara Moule