What is carbon offsetting?
Carbon offsetting is the result of the French government's commitment to offset its carbon emissions under the Kyoto Protocol, which came into force in 2005.
Initially, the agreements were aimed at reducing carbon dioxide emissions, but France has now moved towards carbon neutrality. This means that France must not emit more CO2 than it can absorb. This is the target to be reached by 2050.
Offsetting is based on the fact that the greenhouse gases emitted have an impact on the planet as a whole, so as the name suggests, this effect can be offset.
In other words, a tonne of CO2 emitted in France can be cancelled out by the elimination of a tonne emitted in another country. It is important that the proportions are respected for the effect to be effective.
Carbon offsetting is more commonly defined as a company's investment in environmental projects around the world. This could involve installing solar panels on a nearby farm, planting trees in Africa or creating a market garden on your own land.
Possible approaches
Carbon offsetting involves the purchase of carbon units or emission reduction certificates, issued by the UN. Their purchases involve the use of two mandatory offsetting tools, namely :
- JI: joint implementation: acquisition of emission reduction units
- CDM: Clean Development Mechanism: entitlement to emission reduction certificates
These are the offset mechanisms implemented by the Kyoto Protocol the principle of which is to be continued under theParis Agreement signed at COP21 in 2015 (Article 6, paragraph 4).
In parallel with the Kyoto agreements, there is a carbon offset market open to all, which operates without regulation.
Carbon offsetting is similar to social and environmental responsibility (CSR) initiatives that companies can undertake. The reduction in their emissions can be of several kinds:
- Structural and inherent to the company: changing a process by replacing plastic with a less polluting material
- External and less restrictive with theacquisition of carbon units: this is the case of the Corsia program: a project concerning airlines, stipulating an obligation to acquire carbon credits on an exchange market from 2021 to offset emissions from international flights.
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The effectiveness and results of carbon credits
Our tips for orienting your carbon offset
Before investing in carbon credits, it's important to understand :
- Tons of CO2 emitted can be offset worldwide in absolute terms
- Buying carbon credits does not reduce your company's greenhouse gas emissions
- Carbon offsetting alone is insufficient to achieve carbon neutrality
Tons of CO2 emitted can be offset in absolute terms
As we said earlier, the principle of carbon offsetting assumes the equivalent of two tonnes of CO2 emitted worldwide.
However, one polluted tonne of CO2 is not entirely equivalent to another polluted tonne of CO2, as other components are added depending on the country.
However, the impact on the climate is the same: one tonne of CO2.
Offsetting tons of CO2 on a global scale is therefore possible. We can then encourage the purchase of carbon units, by co-financing the reduction of emissions in another country.
Greenhouse gas emissions are not reduced by carbon offsetting
It is also important to point out that buying a carbon credit does not reduce greenhouse gas emissions. This is a mixture of seven chemical substances, including carbon dioxide. When a company purchases a carbon credit, only its carbon footprint is reduced.
This is a first step towards reducing greenhouse gas emissions.
Alone, it is insufficient to achieve carbon neutrality
Finally, carbon offsetting is not enough to achieve carbon neutrality by 2050. To achieve this, companies need to stop outsourcing their actions and think about internalizing their efforts.
Carbon offsetting alone cannot achieve this, which is in line with the idea that the market cannot solve a problem of its own making.
We need to involve every sector and every company in a decarbonization strategy. This involves internal structural changes, and even a new business model for certain industries.
An example of this approach is the ban on the sale of plastic cutlery by fast-food chains such as Mcdonald.
➡️ TO FIND OUT MORE: The guide of carbon Offsetting
Effects difficult to verify
Companies and individuals who have already gone down the carbon-offset route have encountered a number of obstacles. It's a free and open market, so there's no regulatory authority to oversee the project and ensure results. Carbon offsetting is therefore difficult to verify, and introduces a number of limitations to be aware of before committing your company.
Investment is tricky to track
At first, it's difficult to track your investment and see the positive effects. Indeed, a company that opts for carbon offsetting invests in environmental projects around the world.
The results are complex to qualify
Secondly, the effects are very difficult to measure.
Greenhouse gas emissions are measured on a national scale according to various data, such as the quantity of energy consumed, the activity of a given sector and the average emission rate of that sector. Each country has its own methodology for measuring greenhouse gas emissions. This makes it all the more difficult to measure the impact of reducing CO2 emissions.
The price of carbon offsetting is the subject of much debate, due to the variety of methods used to measure CO2 levels, and the difference in investment costs.
Carbon strategy consultancy Carbone 4 is currently reviewing the adoption of a new carbon accounting system to provide a more accurate account of climate impacts.
Ethics may be challenged
Finally, ethics can be questioned in the way carbon offsets are implemented.
Companies offer to finance environmental projects around the world, in order to offset emissions from their factories. This approach is very often the result of excessive pollution from a plant essential to the company's activity. However, the company is under no obligation to act on behalf of the local population, which is in direct contact with its emissions and is, moreover, the first to be affected.
In the United States, for example, 75% of the carbon offsets of companies that pollute in California are out-of-state projects.
At the same time, there is no guarantee that the rights of local residents will be respected when new projects are set up in foreign countries.
The purchase of carbon credits is compared in the article published in the Guardian as a pass to pollute. The financing of a project replaces the reduction of their emissions.
This idea has also been taken up in a Stanford study, which compares carbon offsetting to the purchase of Catholic indulgences in the 16th century. In other words, a generous donation to the church so that the wealthiest could be forgiven their sins.
➡️ READ: "Forest offsets partner climate-change mitigation with conservation"
We've outlined the questions you need to ask before using carbon credits, and the limits of carbon offsetting. Now we're going to suggest some alternatives so that your company can reap the full benefits of carbon offsetting.
Other solutions are available to offset carbon emissions
Carbon offsetting is the first step towards the 2050 goal of carbon neutrality and energy transition for businesses.
If your company wishes to offset its carbon emissions, as we said earlier, it is possible to call on the services of specialized companies, associations or organizations. Companies specializing in carbon offsetting offer to set up carbon offsets in the vicinity of businesses:
- Farms or plantations close to the company, to support local farmers
- Installation of solar panels or wind turbines
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Carbon offsetting is effective in the short term, but its long-term effects are difficult to verify.
For a lasting effect on your company and its transition, structural and internal changes to the way the company operates are more likely to have long-term effects. For example, discontinuing the marketing of plastic products.
There are practices that are within everyone's reach, and that every company can incorporate into its employees' daily routine. These are interesting alternatives that will help your company in its energy transition.
Reducing CO2 and greenhouse gas emissions can be done on a daily basis:
- Limit air travel and opt for more environmentally-friendly means of transport that consume less fossil fuel.
- Switching to less polluting vehicles
- Favoring bicycle and scooter travel over cars
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That's it! You know all about carbon offsetting. If you have any questions, don't hesitate to send us an e-mail at [email protected]
