By Mary Grace Giles | HAF-UVA Intern
Created in the 1980s, carbon offsets refer to the sequestering or removal of carbon dioxide from the atmosphere to subtract from industrial and personal total emissions. Different techniques (of which tree planting is the most popular) are used to produce carbon offset credits, a purchasable equivalent of 1 metric tonne of removed carbon dioxide.
The offset market has recently gained overwhelming global support as social movements drive more industries and governments to address climate change directly. Despite its popularity, there is no strong international government oversight of the carbon offset market, leading to complexities in evaluating the effectiveness of this economic and environmental practice.
More so, lack of regulation allows actors within this market to create misleading offset claims to increase financial benefits that add –rather than decrease– net emissions. As such, the public and private spheres must take rapid steps to specifically characterize the offset market's realistic impact on the current climate emergency.
Carbon offsets are produced through several different methods. However, researchers widely agreed that credits must be created through environmentally friendly actions that would not exist without the new financing. The most popular method of producing carbon offsets is trees, either planting saplings or protecting forests.
Planting trees is a non-localized solution to carbon emissions. This method of carbon sequestering operates on the basis that all greenhouse gasses (GHG) produced enter a global atmosphere, so planting trees anywhere equally impacts the atmosphere.
A single adult tree will sequester about 1 tonne of carbon every 50 years, and the going rate for carbon credit is USD 7. Tree saplings cost as little as 20 cents, leaving a significant profit to support the infrastructure and expansion of green businesses. Often nonprofits use this monetary surplus to provide fruit-bearing or environmentally beneficial trees to underserved communities.
Beyond tree planting initiatives, carbon offsets confer direct economic value to living forests, providing monetary protections for these resources. Regrettably, despite the positive benefits of tree planting, trees cannot sustain a practical solution to GHG emissions short of massive afforestation of the world’s livable land.
The pitfalls of carbon offsets lie in the lack of industry regulations. Carbon offsets are sustained through two markets: compliance and voluntary. Buyers in these markets must purchase credits in compliance with regulations or act with autonomy to buy credits seeking indirect financial benefits. Ideally, carbon offsets should only target emissions that cannot be removed by other routes.
Instead, carbon credits are often used to raise the total emission cap of a corporation. Even with providers of offsets, there is large variability in the standards of credits- cheap credits are often low quality. Several private, global organizations exist with respected standards to certify carbon offset sources.
They, however, have a fee that makes them less accessible to smaller organizations. Even between these major groups, there are disagreements on standards. The biggest criteria is proof that an offset project could not exist without selling the credits. Companies often get around this standard due to a lack of strict regulations.
Private organizations sell carbon offsets from pre-existing and protected forests. As such, many carbon credits do not indicate new GHG removed from the atmosphere. Even within the developing world, carbon offsets are praised for playing positive roles in developing countries by supporting tree planting and forest protection. At the same time, they often serve to reward the carbon emissions of source nations inadvertently.
The low cost of carbon credits also presents barriers to green initiatives. Carbon offsets remain much more affordable than other methods of carbon removal or transitions to green energy sources. However, tree carbon offsets (like trees) are a temporary solution to global emissions.
The sequestered carbon will eventually return to the environment with the tree’s dead resources. Misleading carbon offsets inundate consumer and private markers, giving the public a false impression of reduced emissions as this short-term solution takes precedent in global markets. The global atmosphere suffers as a result.
Carbon offsets are an essential component of combating climate change, yet they are far from a global miracle drug. The policy is responding to the negative lack of regulation within carbon markets, ensuring in the future, only legitimate carbon sequestering projects can operate. Within the coming years, carbon providers can expect to face stricter rules for credit certification and a more wary buying pool.
To address these changes, tree planting organizations should work to ensure their credits meet the guidelines defined by international groups like the Kyoto Protocol Clean Development Mechanism or Gold Standard, which are major players in creating new policies.
They should prepare sustainable business models based on increased costs of carbon offsets and changes in demand as the industry is forced to employ various sustainable practices. Increased regulation will ensure the positive impact of carbon credit tree-based organizations as active warriors against the climate crisis.
By Julian Stoiber | HAF Volunteer
By Timo Reinitzer | HAF Intern
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