by Chris Lang
REDD-Monitor, September 30, 2023
Criticism of carbon offsets and carbon markets is increasing in both academic research and investigative reporting. This week, Kate Aronoff writes in The New Republic that,
“Over the last few years, a drumbeat of academic research and investigative reporting has painted a bleak picture of carbon offsets and the carbon markets through which they’re traded. Just this week, a team of journalists at Carbon Brief published an exhaustive explainer on offsets and the many damning studies poking holes in a practice that’s long been a darling of climate policy wonks. That includes a study now making its way through the peer review process, which estimates that only 12 percent of carbon-offset projects ‘constitute real emissions reductions.'”
It’s an excellent article, highlighting the fact that the vast majority of carbon offsets on Verra’s registry are worthless “phantom credits.”
Aronoff interviewed Danny Cullenward, Senior Fellow with the Kleinman Center for Energy Policy at the University of Pennsylvania. Cullenward points out that,
“The entire market is structured around a fundamental falsehood: that a ton of carbon we get from burning fossil fuels is identical to a ton of carbon stored in forests. That is 100 percent false. If you store carbon for less time than it takes to stabilize temperatures, that storage does not have any climate benefit.”
Cullenward also tells Aronoff that, “There’s nothing happening today that wasn’t happening five years ago. It’s just that there was no one paying attention to it.”
Hmmm. I don’t know who Cullenward is referring to when he says “no one” was paying attention. It’s a slightly odd comment because he’s been paying attention to the problems with carbon offsets for way longer than five years.
Deja vu, all over again
Anyway, this seems like the perfect opportunity to point out that criticism of carbon markets and carbon offsets is nothing new.
What’s interesting is the similarity of the arguments from 14 years ago to the critiques of carbon offsetting today. Here’s just one example, from a discussion between Larry Lohmann of the Corner House and Abyd Karmali, then-Managing Director, Global Head of Carbon Markets, Merrill Lynch. Lohmann points out that,
“Setting precise targets on paper is futile unless accompanied by immediate steps toward structural change. Carbon markets are explicitly designed to delay those steps. They give the polluters who most urgently need to make a start on major reinvestment – such as big electricity generators – a way to continue business as usual for as long as possible, by buying in cheap greenhouse gas pollution rights from elsewhere.
“By allowing companies to buy offsets instead of reducing their emissions, government are allowing years of inaction before the industries in question begin to do what they have to do to deal with global warming. Worse, these credits do not always even represent verifiable reductions. They come from projects that merely claim to be saving carbon over what would have happened without the credit sales.
“Evidence suggests that most such projects – for example, the bulk of the 763 Chinese hydroelectric dams that have applied or are planning to apply to the United Nations to be allowed to sell over 300 million tonnes of greenhouse gas pollution rights – were going to be built anyway, and are merely topping up their finance by claiming otherwise.”
14 years later, Verra is still in denial about the fact that the vast majority of its carbon credits still do not represent verifiable reductions. And many of the Chinese dams that sold carbon credits through the UN’s Clean Development Mechanism are still selling carbon credits on Verra’s registry. Verra’s ex-CEO, David Antonioli even admitted that the dams were not additional. In an April 2022 interview he told Energy Monitor that, “Those projects were developed before we came to the conclusion that they were no longer additional.”
What’s the difference between carbon offsets and mortgage-backed securities?
In a comment following the post listing the Corner House reports, I linked to a 2008 article by Joe Romm on Climate Progress. Romm asks the question, “What is the difference between carbon offsets and mortgage-backed securities?” His answer is lipstick: “the offsets look on the surface to be more attractive.”
“In the case of the securities, before paying good money for them, you have to figure out what the value of the underlying mortgages are. Oftentimes they are almost worthless. In the case of carbon offsets, before you pay good money for them, you have to figure out the value of the underlying projects they fund. Oftentimes they are almost worthless.”
Romm notes that a major 2008 analysis from Stanford found that,
“’between a third and two thirds’” of emission offsets under the Clean Development Mechanism (CDM) — set up under the Kyoto treaty to encourage emissions reductions in developing nations — do not represent actual emission cuts.”
Again, it all sounds very similar to today’s arguments about the vast majority of Verra’s carbon offsets being worthless.
Romm recently wrote a paper published by the University of Pennsylvania Center for Science, Sustainability and the Media, which concludes that “carbon offsets are unscalable, unjust, and unfixable — and a threat to the Paris Agreement.”
In a 2007 post, Romm explains the “First Rule of Carbon Offsets: No Trees”. He quotes from a 2005 study that is critical of using trees to offset emissions from burning fossil fuels. One of the authors of the study, Ken Caldeira of Stanford University told The Guardian that,
“The idea that you can go out and plant a tree and help reverse global warming is an appealing, feel-good thing. To plant forests to mitigate climate change outside of the tropics is a waste of time.”
The Guardian wrote that,
“Prof Caldeira said planting trees was a diversion, letting consumers pollute more. He said it would be better to transform the way energy was derived and used, for instance through investment in renewable and carbon-free electricity generation.”
Grist picked up on Romm’s argument and pointed out that the biggest problem is timing:
“Unfortunately, trees grow rather slowly. And particularly when they’re small, they don’t sequester much carbon. The small print on tree-planting offsets typically indicate a 40-year maturity. If you buy a tree-based offset today, you’re sponsoring a reduction that won’t be complete until 2047, by which time we’ll either be living in hurricane-proof seaside bunkers in the Rockies or flying around in hydrogen-fueled jet cars.”
Grist also noted five other problems with tree-based offsets: permanence; measurability; sunlight absorption (the albedo effect); leakage; and the dangers of plantations consisting of monocultures of non-native species.
Needless to say, none of these problems have gone away.
This week, Carbon Brief has run a series of articles about carbon offsetting. One of them gives a timeline of carbon offsetting. It includes a quotation from Mark Trexler, who worked on the first ever land-based carbon offset scheme in 1988.
Trexler tells Carbon Brief that offsets were aimed at “getting companies and electric utilities to think about carbon dioxide for the first time, to make some commitments, even if they were based on using offsets.”
And he adds that,
“No one ever thought that carbon offsets were going to save the world. That just wasn’t the way we were thinking about this. We were thinking: this is an interim measure until public policy gets going. It was a way of getting the conversation started. No one then thought that we would be doing offsets 35 years later.”
Surely, then, now would be a really good time to scrap carbon offsets.