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Carbon oset

A carbon oset is a reduction in emissions of carbon tum mainly among consumers in western countries who
dioxide or greenhouse gases made in order to compensate have become aware and concerned about the poten-
for or to oset an emission made elsewhere.[1][2][3][4] tially negative environmental eects of energy-intensive
Carbon osets are measured in metric tons of carbon lifestyles and economies. The Kyoto Protocol has sanc-
tioned osets as a way for governments and private com-
dioxide-equivalent (CO2 e) and may represent six primary
categories of greenhouse gases: carbon dioxide (CO2 ), panies to earn carbon credits that can be traded on a mar-
[5]
Clean Develop-
methane (CH4 ), nitrous oxide (N2 O), peruorocarbons ketplace. The protocol established the
(PFCs), hydrouorocarbons (HFCs), and sulfur hexau- ment Mechanism (CDM), which validates and measures
[6]
oride (SF6 ). One carbon oset represents the reduction projects to ensure they produce authentic benets and
of one metric ton of carbon dioxide or its equivalent in are genuinely additional activities that would not oth-
other greenhouse gases. erwise have been undertaken. Organizations that are un-
able to meet their emissions quota can oset their emis-
There are two markets for carbon osets. In the larger, sions by buying CDM-approved Certied Emissions Re-
compliance market, companies, governments, or other ductions. Emissions from burning fuel, such as red diesel,
entities buy carbon osets in order to comply with caps has pushed one UK fuel supplier to create a carbon oset
on the total amount of carbon dioxide they are allowed to fuel named Carbon Oset Red Diesel.
emit. This market exists in order to achieve compliance
with obligations of Annex 1 Parties under the Kyoto Pro- Osets may be cheaper or more convenient alternatives
tocol, and of liable entities under the EU Emission Trad- to reducing ones own fossil-fuel consumption. However,
ing Scheme. In 2006, about $5.5 billion of carbon osets some critics object to carbon osets, [13]
and question the
were purchased in the compliance market, representing benets of certain types of osets. Due diligence is
about 1.6 billion metric tons of CO2 e reductions.[7] recommended to help businesses in the assessment and
identication of good quality osets to ensure oset-
In the much smaller, voluntary market, individuals, com- ting provides the desired additional environmental ben-
panies, or governments purchase carbon osets to miti- ets, and to avoid reputational risk associated with poor
gate their own greenhouse gas emissions from transporta- quality osets.[14]
tion, electricity use, and other sources. For example, an
individual might purchase carbon osets to compensate Osets are viewed as an important policy tool to[15] maintain
for the greenhouse gas emissions caused by personal air stable economies and to improve sustainability. One of
[8]
travel. Many companies (see list ) oer carbon osets the hidden dangers of climate change policy is unequal
as an up-sell during the sales process so that customers prices of carbon in the economy, which can cause eco-
can mitigate the emissions related with their product or nomic collateral damage if production ows to regions
service purchase (such as osetting emissions related to or industries that have a lower price of carbonunless
a vacation ight, car rental, hotel stay, consumer good, carbon can be purchased from that area, [16]
which osets
etc.). In 2008, about $705 million of carbon osets were eectively permit, equalizing the price.
purchased in the voluntary market, representing about
123.4 million metric tons of CO2 e reductions.[9] Some
fuel suppliers in the UK oer fuel which has been carbon 1 Denitions
oset such as Fuel dyes.
Osets are typically achieved through nancial support of 2 Features
projects that reduce the emission of greenhouse gases in
the short- or long-term. The most common project type
is renewable energy,[10] such as wind farms, biomass en- Carbon osets have several common features:
ergy, or hydroelectric dams. Others include energy e-
ciency projects, the destruction of industrial pollutants or Vintage. The vintage is the year in which the carbon
agricultural byproducts, destruction of landll methane, reduction takes place.[17]
and forestry projects.[11] Some of the most popular car-
bon oset projects from a corporate perspective are en- Source. The source refers to the project or technol-
ergy eciency and wind turbine projects.[12] ogy used in osetting the carbon emissions. Projects
can include land-use, methane, biomass, renewable
Carbon osetting has gained some appeal and momen-
energy and industrial energy eciency. Projects

1
2 3 CARBON OFFSET MARKETS

3.1 Global market


In 2009, 8.2 billion metric tons of carbon dioxide equiva-
lent changed hands worldwide, up 68 per cent from 2008,
according to the study by carbon-market research rm
Point Carbon, of Washington and Oslo. But at EUR94
billion, or about $135 billion, the markets value was
nearly unchanged compared with 2008, with world car-
bon prices averaging EUR11.40 a ton, down about 40 per
cent from the previous year, according to the study.[22]
The World Banks State and Trends of the Carbon Mar-
ket 2010[23] put the overall value of the market at $144
billion, but found that a signicant part of this gure re-
sulted from manipulation of a VAT loophole.[24]
90% of voluntary oset volumes were contracted by the
private sector where corporate social responsibility and
industry leadership were primary motivations for oset
purchases.[25]
Oset buyers desire to positively impact the climate re-
silience of their supply chain or sphere of inuence was
evident in our data which identies a strong relationship
between buyers business sectors and the project cate-
gories from which they contract osets.[25]

3.2 E.U. market


Wind turbines near Aalborg, Denmark. Renewable energy The global carbon market is dominated by the European
projects are the most common source of carbon osets. Union, where companies that emit greenhouse gases are
required to cut their emissions or buy pollution allowances
or carbon credits from the market, under the European
may also have secondary benets (co-benets). For Union Emission Trading Scheme (EU ETS). Europe,
example, projects that reduce agricultural green- which has seen volatile carbon prices due to uctuations
house gas emissions may improve water quality by in energy prices and supply and demand, will continue to
reducing fertilizer usage.[18] dominate the global carbon market for another few years,
as the U.S. and Chinathe worlds top pollutershave
yet to establish mandatory emission-reduction policies.
Certication regime. The certication regime de-
scribes the systems and procedures that are used
to certify and register carbon osets. Dierent 3.3 U.S. market
methodologies are used for measuring and verify-
ing emissions reductions, depending on project type, On the whole, the U.S. market remains primarily a vol-
size and location.[19] For example, the CDM uses untary market, but multiple cap and trade regimes are ei-
another.[20] In the voluntary market, a variety of in- ther fully implemented or near-imminent at the regional
dustry standards exist. These include the Voluntary level. The rst mandatory, market-based cap-and-trade
Carbon Standard and the CDM Gold Standard that program to cut CO2 in the U.S., called the Regional
are implemented to provide third-party verication Greenhouse Gas Initiative (RGGI), kicked into gear in
of carbon oset projects.[14] There are some addi- Northeastern states in 2009, growing nearly tenfold to
tional standards for the validation of co-benets, in- $2.5 billion, according to Point Carbon. Western Climate
cluding the CCBS, issued by the Climate, Commu- Initiative (WCI)a regional cap-and-trade program in-
nity & Biodiversity Alliance and the Social Carbon cluding seven western states (California notably among
Standard,[21] issued by Ecologica Institute. them) and four Canadian provinceshas established a
regional target for reducing heat-trapping emissions of
15 percent below 2005 levels by 2020. A component of
Californias own Global Warming Solutions Act of 2006,
kicked o in early 2013, requires high-emissions indus-
3 Carbon oset markets tries to purchase carbon credits to cover emissions in ex-
cess of 25,000 CO2 metric tons.
3

3.4 Voluntary market late their carbon footprint, most commonly through
a web-based interface including a calculator or ques-
Participants A wide range of participants are involved tionnaire, and sell them osets in the amount of that
in the voluntary market, including providers of dif- footprint.[28] In addition many companies selling
ferent types of osets, developers of quality assur- products and services, especially carbon-intensive
ance mechanisms, third party veriers, and con- ones such as airline travel,[29][30] oer options to
sumers who purchase osets from domestic or inter- bundle a proportional osetting amount of carbon
national providers. Suppliers include for-prot com- credits with each transaction.
panies, governments, charitable non-governmental
organizations, colleges and universities, and other
Suppliers of voluntary osets operate under
groups.[26]
both nonprot and social enterprise models,
or a blended approach sometimes referred to
Motivations According to industry analyst Ecosystem
as triple bottom line. Other suppliers include
Marketplace, the voluntary markets present the op-
broader environmentally focused organizations
portunity for citizen consumer action, as well as
with website subsections or initiatives that en-
an alternative source of carbon nance and an in-
able retail voluntary oset purchases by mem-
cubator for carbon market innovation. In their
bers, and government created projects.
survey of voluntary markets, data has shown that
"Corporate Social Responsibility" and Public Re-
lations/Branding are clearly in rst place among Features of companies that voluntarily oset emissions
motivations for voluntary oset purchases, with evi- Companies that voluntarily oset their own emis-
dence indicating that companies seek to oset emis- sions tend to be of relatively low carbon intensity,
sions for goodwill, both of the general public and as they can oset a signicant proportion of their
their investors. emissions at relatively low cost.[31] Voluntary oset-
ting is particularly common in the nancial sector.
In addition, regarding market composition, re- 61 per cent of nancial companies in the FTSE 100
search indicates: Though many analysts per- oset at least a portion of their 2009 emissions.
ceive pre-compliance buying as a dominant Twenty-two per cent of nancial companies in the
driving force in the voluntary market, the re- FTSE 100 considered their entire 2009 operations
sults of our survey have repeatedly indicated to be carbon neutral.[10]
that precompliance motives (as indicated by
'investment/resale and 'anticipation of regula-
tion') remain secondary to those of the pure 4 Sources of carbon osets
voluntary market (companies/individuals o-
setting their emissions).[27]
The CDM identies over 200 types of projects suitable for
generating carbon osets, which are grouped into broad
Pre-compliance & trading The other main category
categories. These project types include renewable energy,
of buyers on the voluntary markets are those en-
methane abatement, energy eciency, reforestation and
gaged in pre-compliance and/or trading. Those pur-
fuel switching.[11]
chasing osets for pre-compliance purposes are do-
ing so with the expectation, or as a hedge against
the possibility, of future mandatory cap and trade
4.1 Renewable energy
regulations. As a mandatory cap would sharply in-
crease the price of osets, rmsespecially those
Renewable energy osets commonly include wind power,
with large carbon footprints and the corresponding
solar power, hydroelectric power and biofuel. Some of
nancial exposure to regulationmake the decision
these osets are used to reduce the cost dierential be-
to acquire osets in advance at what are expected to
tween renewable and conventional energy production, in-
be lower prices.
creasing the commercial viability of a choice to use re-
newable energy sources.
The trading market in osets in general resem-
bles the trade in other commodities markets, Renewable Energy Credits (RECs) are also sometimes
with nancial professionals including hedge treated as carbon osets, although the concepts are dis-
funds and desks at major investment banks, tinct. Whereas a carbon oset represents a reduction in
taking positions in the hopes of buying cheap greenhouse gas emissions, a REC represents a quantity
and selling dear, with their motivation typically of energy produced from renewable sources. To con-
short or medium term nancial gain. vert RECs into osets, the clean energy must be trans-
lated into carbon reductions, typically by assuming that
Retail Multiple players in the retail market have oer- the clean energy is displacing an equivalent amount of
ings that enable consumers and businesses to calcu- conventionally produced electricity from the local grid.
4 4 SOURCES OF CARBON OFFSETS

This is known as an indirect oset (because the reduc- Assuming energy demand does not change, this re-
tion doesn't take place at the project site itself, but rather duces the carbon dioxide emitted.
at an external site), and some controversy surrounds the
question of whether they truly lead to additional emis- 3. Energy-ecient buildings reduce the amount of en-
sion reductions and who should get credit for any reduc- ergy wasted in buildings through ecient heating,
tions that may occur.[32][33] Intel corporation is the largest cooling or lighting systems. In particular, the re-
purchaser of renewable power in the US.[34] placement of incandescent light bulbs with compact
uorescent lamps can have a drastic eect on en-
ergy consumption. New buildings can also be con-
4.2 Methane collection and combustion structed using less carbon-intensive input materials.

Some oset projects consist of the combustion or con-


tainment of methane generated by farm animals (by use 4.4 Destruction of industrial pollutants
of an anaerobic digester),[35] landlls[36] or other indus-
trial waste. Methane has a global warming potential Industrial pollutants such as hydrouorocarbons (HFCs)
(GWP) 23 times that of CO2 ; when combusted, each and peruorocarbons (PFCs) have a GWP many thou-
molecule of methane is converted to one molecule of sands of times greater than carbon dioxide by volume.[38]
CO2 , thus reducing the global warming eect by 96%. Because these pollutants are easily captured and de-
An example of a project using an anaerobic digester can stroyed at their source, they present a large and low-cost
be found in Chile where in December 2000, the largest source of carbon osets. As a category, HFCs, PFCs,
pork production company in Chile, initiated a voluntary and N2 O reductions represent 71 per cent of osets is-
process to implement advanced waste management sys- sued under the CDM.[11]
tems (anaerobic and aerobic digestion of hog manure), in
order to reduce greenhouse gas (GHG) emissions.[37]
4.5 Land use, land-use change and
forestry
4.3 Energy eciency
Land use, land-use change and forestry (LULUCF)
projects focus on natural carbon sinks such as forests and
soil. Deforestation, particularly in Brazil, Indonesia and
parts of Africa, account for about 20 per cent of green-
house gas emissions.[39] Deforestation can be avoided ei-
ther by paying directly for forest preservation, or by using
oset funds to provide substitutes for forest-based prod-
ucts. There is a class of mechanisms referred to as REDD
schemes (Reducing emissions from deforestation and for-
est degradation), which may be included in a post-Kyoto
agreement. REDD credits provide carbon osets for the
protection of forests, and provide a possible mechanism
to allow funding from developed nations to assist in the
protection of native forests in developing nations.
Almost half of the worlds people burn wood (or ber or
dung) for their cooking and heating needs. Fuel-ecient
Chicago Climate Justice activists protesting cap and trade legis-
lation in front of Chicago Climate Exchange building in Chicago
cook stoves can reduce fuel wood consumption by 30 to
Loop 50%, though the warming of the earth due to decreases
in particulate matter (i.e. smoke) from such fuel-ecient
While carbon osets that fund renewable energy projects stoves has not been addressed. There are a number of
help lower the carbon intensity of energy supply, energy dierent types of LULUCF projects:
conservation projects seek to reduce the overall demand
for energy. Carbon osets in this category fund projects
of several types: Avoided deforestation is the protection of existing
forests.
1. Cogeneration plants generate both electricity and
heat from the same power source, thus improving Reforestation is the process of restoring forests on
upon the energy eciency of most power plants, land that was once forested.
which waste the energy generated as heat.
Aorestation is the process of creating forests on
2. Fuel eciency projects replace a combustion device land that was previously unforested, typically for
with one using less fuel per unit of energy provided. longer than a generation.
4.9 Carbon retirement 5

Soil management projects attempt to preserve or veloping countries. These pumps are used by farmers,
increase the amount of carbon sequestered in soil. using human power, in place of diesel pumps.[43] How-
ever, given that treadle pumps are best suited to pump-
ing shallow water, while diesel pumps are usually used
4.6 Purchase of carbon allowances from to pump water from deep boreholes, it is not clear that
emissions trading schemes the treadle pumps are actually achieving real emissions
reductions. Other companies have explored and rejected
Voluntary purchasers can oset their carbon emissions by treadle pumps as a viable carbon osetting approach due
purchasing carbon allowances from legally mandated cap- to these concerns.
and-trade programs such as the Regional Greenhouse Gas
Initiative or the European Emissions Trading Scheme. By
purchasing the allowances that power plants, oil rener- 4.9 Carbon retirement
ies, and industrial facilities need to hold to comply with a
cap, voluntary purchases tighten the cap and force addi- Carbon retirement involves retiring allowances from
tional emissions reductions. emission trading schemes as a method for osetting car-
bon emissions. Under schemes such as the European
Voluntary purchases can also be made through small- Union Emission Trading Scheme, EU Emission Al-
scale and sometimes uncertied schemes such as those lowances (EUAs), which represent the right to release
oered at South African based Promoting Access to Car- carbon dioxide into the atmosphere, are issued to all the
bon Equity Centre (PACE),[40] which nevertheless oer largest polluters. The theory is that by buying these al-
clear services such as poverty alleviation in the form of re- lowances and permanently removing them, the price of
newable energy development. Also, as easy carbon cred- EUAs increases and provides an incentive for industrial
its are coming to an end,[41] these projects have the po- companies to reduce their emissions.[44]
tential to develop projects that are either too small or too
complicated to benet from legally mandated cap-and-
trade programs.
5 Accounting for and verifying re-
ductions
4.7 Links with emission trading schemes
Due to their indirect nature, many types of oset are dif-
Main article: Carbon Credit cult to verify. Some providers obtain independent certi-
cation that their osets are accurately measured, to dis-
Once it has been accredited by the UNFCCC a carbon tance themselves from potentially fraudulent competitors.
oset project can be used as carbon credit and linked with The credibility of the various certication providers is of-
ocial emission trading schemes, such as the European ten questioned. Certied osets may be purchased from
Union Emission Trading Scheme[42] or Kyoto Protocol, commercial or non-prot organizations for US$2.75
as Certied Emission Reductions. European emission al- 99.00 per tonne of CO2 ,[45] due to uctuations of mar-
lowances for the 20082012 second phase were selling ket price. Annual carbon dioxide emissions in developed
for between 21 and 24 Euros per metric ton of CO2 as of countries range from 6 to 23 tons per capita.
July 2007. Accounting systems dier on precisely what constitutes
The voluntary Chicago Climate Exchange also includes a a valid oset for voluntary reduction systems and for
carbon oset scheme that allows oset project developers mandatory reduction systems. However formal standards
to sell emissions reductions to CCX members who have for quantication exist based on collaboration between
voluntarily agreed to meet emissions reduction targets. emitters, regulators, environmentalists and project devel-
opers. These standards include the Voluntary Carbon
The Western Climate Initiative, a regional greenhouse gas
Standard, Green-e Climate, Chicago Climate Exchange
reduction initiative by states and provinces along the west-
and the CDM Gold Standard, the latter of which expands
ern rim of North America, includes an oset scheme.
upon the requirements for the Clean Development Mech-
Likewise, the Regional Greenhouse Gas Initiative, a sim-
anism of the Kyoto Protocol.
ilar program in the northeastern U.S., includes an oset
program. A credit mechanism that uses osets may be Accounting of osets may address the following basic ar-
incorporated in proposed schemes such as the Australian eas:
Carbon Exchange.
Baseline and MeasurementWhat emissions would
occur in the absence of a proposed project? And
4.8 Other how are the emissions that occur after the project is
performed going to be measured?
A UK oset provider set up a carbon osetting scheme
that set up a secondary market for treadle pumps in de- AdditionalityWould the project occur anyway
6 6 QUALITY ASSURANCE SCHEMES

without the investment raised by selling carbon o- What eects might a project have on future changes
set credits? There are two common reasons why a in land use and could conicts arise from this?
project may lack additionality: (a) if it is intrinsi-
cally nancially worthwhile due to energy cost sav- Can small-scale producers engage in the scheme?
ings, and (b) if it had to be performed due to envi-
What are the 'add on' benets to the country
ronmental laws or regulations.
for example, will it assist capacity-building in local
PermanenceAre some benets of the reductions institutions?[49]
reversible? (for example, trees may be harvested to
burn the wood, and does growing trees for fuel wood Putting a price on carbon encourages innovation by pro-
decrease the need for fossil fuel?) If woodlands are viding funding for new ways to reduce greenhouse gases
increasing in area or density, then carbon is being in many sectors. Carbon reduction goals drive the de-
sequestered. After roughly 50 years, newly planted mand for osets and carbon trading, encouraging the de-
forests will reach maturity and remove carbon diox- velopment of this new industry and oering opportunities
ide more slowly. for dierent sectors to develop and use innovative new
technologies.[46]
LeakageDoes implementing the project cause
higher emissions outside the project boundary? Carbon oset projects also provide savings energy e-
ciency measures may reduce fuel or electricity consump-
tion, leading to a potential reduction in maintenance and
5.1 Co-benets operating costs.[46]

Overall, carbon osets improve the environment by re-


ducing the amount of greenhouse gases in the earths at- 6 Quality assurance schemes
mosphere. Oset projects often also lead to a number
of co-benets such as better air and water quality, and
6.1 Quality Assurance Standard for Car-
healthier communities.[46]
bon Osetting (QAS)
While the primary goal of carbon osets is to reduce
global carbon emissions, many oset projects also claim In an eort to inform and safeguard business and house-
to lead to improvements in the quality of life for a localhold consumers purchasing Carbon Osets, in 2009,[50]
population. These additional improvements are termed the UK Government has launched a scheme for regu-
co-benets, and may be considered when evaluating and lating Carbon oset products.[51] DEFRA have created
comparing carbon oset projects. Some possible co- the Approved Carbon Osetting brand to use as an en-
benets from a project that replaces wood-burning stoves dorsement on osets[52] approved by the UK government.
with ovens using a less carbon-intensive fuel include: The Scheme sets standards for best practice in osetting.
Approved osets have to demonstrate the following cri-
Lower nongreenhouse gas pollution (smoke, ash, teria:
and chemicals), which improves health in the home.
Accurate calculation of emissions to be oset
Better preservation of forests, which are an impor-
tant habitat for wildlife. Use of good quality carbon credits i.e. initially those
that are Kyoto compliant
In a recent survey conducted by EcoSecurities, Conser-
Cancellation of carbon credits within a year of the
vation International, CCBA and ClimateBiz, of the 120
consumers purchase of the oset
corporates surveyed more than 77 per cent rated commu-
nity and environmental benets as the prime motivator Clear and transparent pricing of the oset
for purchasing carbon osets.[47]
Carbon oset projects can also negatively aect quality of Provision of information about the role of osetting
life. For example, people who earn their livelihoods from in tackling climate change and advice on how a con-
collecting rewood and selling it to households could be- sumer can reduce his or her carbon footprint
come unemployed if rewood is no longer used. A paper
from the Overseas Development Institute oers some in- The rst company to qualify for the scheme was Clear,
dicators to be used in assessing the potential developmen- followed by Carbon Footprint, Carbon Passport, Pure,
tal impacts of voluntary carbon oset schemes:[48] British Airways and Carbon Retirement Ltd.
On 20 May 2011 the Department of Energy and Climate
What potential does the project have for income Change announced that the Quality Assurance Scheme
generation? would close on 30 June 2011.[53] The stated purpose of
7.3 Eectiveness of tree-planting osets 7

the Quality Assurance Scheme was 'to provide a straight- for the guilty to pay for absolution rather than changing
forward route for those wishing to oset their emis- their behavior. George Monbiot, an English environmen-
sions to identify quality osets.[53] Critics of the clo- talist and writer, says that carbon osets are an excuse
sure therefore argued that without the scheme, businesses for business as usual with regard to pollution.[61][62] Pro-
and individuals would struggle to identify quality carbon ponents hold that the indulgence analogy is awed be-
osets.[54] cause they claim carbon osets actually reduce carbon
In 2012 the scheme was relaunched as the Quality Assur- emissions, changing the business as usual, and therefore
ance Standard (QAS).[55] The QAS is now run indepen- address the root cause of climate change.[63] Proponents
of osets claim that third-party certied carbon osets
dently by Quality Assurance Standard Ltd which is a com-
pany limited by guarantee based in the United Kingdom. are leading to increased investment in renewable energy,
energy eciency, methane biodigesters and reforestation
The Quality Assurance Standard is a comprehensive in-
dependent audit system for carbon osets. Approved o- and avoided deforestation projects, and claim that these
alleged eects are the intended goal of carbon osets. On
sets are checked against a 40-point checklist[56] to ensure
they meet the very highest standards in the world. October 16, 2009 responsibletravel.com, once a strong
voice in favour of carbon osetting, announced that it
On 17 July 2012, the rst organisations were approved as would stop oering carbon osetting to its clients, stat-
meeting the new QAS. ing that too often osets are being used by the tourism
industry in developed countries to justify growth plans on
the basis that money will be donated to projects in devel-
6.2 Australian Government National Car- oping countries. Global reduction targets will not be met
bon Oset Program this way.[64]
On 4 February 2010, travel networking site Vida Loca
The Australian government is currently in a consultation
Travel announced that they would donate 5 per cent of
period on the regulation of Carbon Osets.[57] On 20 De-
prots to International Medical Corps, as they feel that
cember 2013, the Australian Government released the
international aid can be more eective at cutting global
Emissions Reduction Fund Green Paper outlining its pre-
warming in the long term than carbon osetting, citing
ferred design options for the Emissions Reduction Fund:
the work of economist Jerey Sachs.[65]
a carbon buy-back model. The Government invites pub-
lic comment and written submissions on the Green Paper
by 5pm on Friday 21 February 2014.[58] 7.3 Eectiveness of tree-planting osets
Some environmentalists have questioned the eec-
7 Controversies tiveness of tree-planting projects for carbon oset
purposes.[66] Critics point to the following issues with tree
planting projects:
7.1 Project-osetting
Less than 30 pence in every pound spent on some car- Timing. Trees reach maturity over a course of
bon oset schemes goes directly to projects designed to many decades. Project developers and oset retail-
reduce emissions.[59] The gures reported by the BBC[60] ers typically pay for the project and sell the promised
and based on UN data reported that typically 28p goes reductions up-front, a practice known as forward
to the set up and maintenance costs of an environmen- selling.
tal project. 34p goes to the company that takes on the Permanence. It is dicult to guarantee the per-
risk that the project may fail. The projects investors take manence of the forests, which may be suscepti-
19p, with smaller amounts of money being distributed ble to clearing, burning, or mismanagement. The
between organisations involved in brokering and audit- well-publicized instance of the Coldplay forest, in
ing the carbon credits. In that respect carbon Osets are which a forestry project supported by the British
similar to most consumer products, with only a fraction of band Coldplay resulted in a grove of dead mango
sale prices going to the o-shore producers, the rest being trees, illustrates the diculties of guaranteeing the
shared between investors and distributors who bring it to permanence of tree-planting osets.[67] When dis-
the markets, who themselves need to pay their employees cussing tree osets, forest campaigner Jutta Kill of
and service providers such as advertising agencies most European environmental group FERN, claried the
of the time located in expensive areas. physical reality that Carbon in trees is temporary:
Trees can easily release carbon into the atmosphere
through re, disease, climatic changes, natural de-
7.2 Indulgence controversy cay and timber harvesting.[68]
Some activists disagree with the principle of carbon o- Monocultures and invasive species. In an eort
sets, likening them to Roman Catholic indulgences, a way to cut costs, some tree-planting projects introduce
8 7 CONTROVERSIES

fast-growing invasive species that end up damaging displaced for a FSC-certied plantation to oset carbon
native forests and reducing biodiversity. For exam- by London-based New Forests Company[74]
ple, in Ecuador, the Dutch FACE Foundation has an
oset project in the Andean Pramo involving 220
square kilometres of eucalyptus and pine planted. 7.5 Additionality and lack of regulation in
The NGO Accin Ecolgica criticized the project the voluntary market
for destroying a valuable Pramo ecosystem by in-
troducing exotic tree species, causing the release of Several certication standards exist, oering varia-
much soil carbon into the atmosphere, and harming tions for measuring emissions baseline, reductions,
local communities who had entered into contracts additionality, and other key criteria. However, no single
with the FACE Foundation to plant the trees.[69] standard governs the industry, and some oset providers
However, some certication standards, such as the have been criticized on the grounds that carbon reduc-
Climate Community and Biodiversity Standard re- tion claims are exaggerated or misleading. Problems
quire multiple species plantings. include:[75][76][77]

Methane. A recent study has claimed that plants are


Widespread instances of people and
a signicant source of methane, a potent greenhouse
organizations buying worthless credits
gas, raising the possibility that trees and other terres-
that do not yield any reductions in carbon
trial plants may be signicant contributors to global
emissions.
methane levels in the atmosphere.[70] However, this
claim has been disputed recently by ndings in an- Industrial companies proting from do-
other study.[71] ing very little or from gaining carbon
credits on the basis of eciency gains
The albedo eect. Another study suggested that from which they have already beneted
high latitude forests probably have a net warming substantially.
eect on the Earths climate, because their absorp- Brokers providing services of question-
tion of sunlight creates a warming eect that bal- able or no value.
ances out their absorption of carbon dioxide.[72]
A shortage of verication, making it dif-
Necessity. Corporate tree-planting is not a new cult for buyers to assess the true value
idea; farming operations have been used by com- of carbon credits.
panies making paper from trees for a long time.
If farmed trees are replanted, and the products
made from them are placed into landlls rather than 7.6 Perverse incentives
recycled, a very safe, ecient, economical and time-
proven method of geological sequestration of green- Because osets provide a revenue stream for the reduc-
house carbon is the result of the paper product use tion of some types of emissions, they can in some cases
cycle. This only holds if the paper in the land ll provide incentives to emit more, so that emitting enti-
is not decomposted. In most landlls, this is the ties can later get credit for reducing emissions from an
case and leads to the fact that more than half of the articially high baseline. This is especially the case for
greenhouse gas emissions from the life cycle of pa- osets with a high prot margin. For example, one Chi-
per products occur from landll methane emissions. nese company generated $500 million in carbon osets
by installing a $5 million incinerator to burn the HFCs
produced by the manufacture of refrigerants. The huge
7.4 Indigenous land rights issues prots provided incentive to create new factories or ex-
pand existing factories solely for the purpose of increas-
Tree-planting projects can cause conicts with indigenous ing production of HFCs and then destroying the resultant
people who are displaced or otherwise nd their use of pollutants to generate osets. Not only is this outcome
forest resources curtailed. For example, a World Rain- environmentally undesirable, it undermines other oset
forest Movement report[73] documents land disputes and projects by causing oset prices to collapse.[78][79] The
human rights abuses at Mount Elgon. In March 2002, practice had become so common that oset credits are
a few days before receiving Forest Stewardship Council now no longer awarded for new plants to destroy HFC-
certication for a project near Mount Elgon, the Uganda 23.[80]
Wildlife Authority evicted more than 300 families from In Nigeria oil companies are o 40 per cent of the
the area and destroyed their homes and crops. That the natural gas found. The Agip Oil Company plans to build
project was taking place in an area of on-going land con- plants to generate electricity from this gas and thus claim
ict and alleged human rights abuses did not make it into 1.5 million oset credits a year. United States company
project report. A 2011 report by Oxfam International de- Pan Ocean Oil Corporation has also applied for credits
scribes a case where over 20,000 farmers in Uganda were in exchange for processing its own waste gas in Nigeria.
9

Oilwatch.orgs Michael Karikpo calls this outrageous, 9 References


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sale of indulgences prior to the Reformation -that as long
the Christian Science Monitor , The Guardian , Mother
as you hand over your money, your sins are deemed to
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12 11 TEXT AND IMAGE SOURCES, CONTRIBUTORS, AND LICENSES

11 Text and image sources, contributors, and licenses


11.1 Text
Carbon oset Source: https://en.wikipedia.org/wiki/Carbon_offset?oldid=752241029 Contributors: William Avery, Edward, Mac,
William M. Connolley, Alan Liefting, BenFrantzDale, Levin, Orpheus, Beland, Roisterer, PFHLai, Subsume, Grstain, Spiy sperry,
Discospinster, Rich Farmbrough, Vsmith, Dieguez, Bender235, Jensbn, Szyslak, EurekaLott, Bobo192, Circeus, Smalljim, Mwpro-
ductions, Idleguy, A2Kar, Rd232, Runxctry, Tony Sidaway, Zawersh, Guy M, Barrylb, Tabletop, GregorB, Frankie1969, Dysepsion,
Padraic, Rjwilmsi, Coemgenus, DeadlyAssassin, Stardust8212, Yamamoto Ichiro, SchuminWeb, SouthernNights, Alphachimp, Theo Par-
dilla, Wavelength, Scott Teresi, Hairy Dude, Cyferx, RussBot, Arjuna909, Bovineone, Wimt, Andipi, Anomalocaris, Astral, Adamrush,
Kadaniel~enwiki, Yabbadab, BMT, Mofoburrell, Lynbarn, Naught101, Jonearles, SmackBot, RedHouse18, Goggsie, Reedy, Jinxmchue,
Gilliam, Liamdaly620, Deli nk, Can't sleep, clown will eat me, Sholto.mac, Nils Simon, Lcarscad, ArglebargleIV, John, CorvetteZ51,
Vgy7ujm, Evildictaitor, Tlesher, Mwgillenwater, Patau, OmicronSSD, Ckatz, Aardvark23, Smith609, Waggers, CapitalR, Dan1679, Ebar-
cell, CmdrObot, Escaper7, Ale jrb, Ralph Purtcher, Cydebot, Gogo Dodo, Medovina, Teratornis, Alaibot, Kozuch, Leberquesgue, Black-
jack48, Richhoncho, KimDabelsteinPetersen, Gralo, Brichcja, Thelongroad1980, Yomangani, Mshoichi, Ecoconservant, Myanw, Amber-
room, Carbonfund, O-Jay, Michaeljancsy, MER-C, Italiavivi, Albany NY, Tomolongo, VoABot II, Yakushima, Edkirk, Brusegadi, Ani-
mum, MyTigers, Sustainableyes, Glen, DerHexer, MartinBot, Braquin, Akbeancounter, Lesikar, Davesag, Mlhwitz, Snozzer, JChurchman-
Davies, Johnaburton, Ugaap, Naruttebayo, Oupblog, Jonpro, NMGarrison, Ephebi, Vanished user g454XxNpUVWvxzlr, Anietor, Blue-
tuatara, Doug141, Jnp2109, Gailandgeorge, Nscott.odi, Useight, WLRoss, Barnsdirect, Shaunus4, RJASE1, Milesisgreat, Johnfos,
Amikake3, LeilaniLad, Marekzp, TXiKiBoT, Malljaja, JayC, WaxMouse, Benyon3, Greenbailiwick, Digitalsmear, Jrsperling, LittleMidge,
Dirkbb, Hamish Ford, Coco2~enwiki, Bitbut, Domx1, Whichwitch, Mjacks3, Monkeyowl, Rjakew, Wede~enwiki, Shaker john, Ponyo, Dan
Dreadless, Dave8904, Caltas, Brad Kenney, Calabraxthis, Grundle2600, Flyer22 Reborn, Carbonconsultant, Nopetro, AngelOfSadness,
PhilMacD, Lightmouse, Jimad, Osetters, Johnanth, Vaarky, Jajjaj, Bpeps, Sjoutt, Quoth-the-craven, Mrfebruary, ImageRemovalBot,
ClueBot, Mintal, Mariordo, Ebeatty7, CiudadanoGlobal, The Thing That Should Not Be, Scarsxrunxdeep, Michaelsbaum, Auntof6, Lemins,
Having-too-much-fun, Jesco dalquen, Sun Creator, Kaeso Dio, Snacks, Greenheadduck, Thingg, Versus22, Nmenezes, Djmackenzie, As-
tral90, DumZiBoT, Thumbtackz, Gwandoya, MLRainforest, Boyd Reimer, Antirat~enwiki, Dthomsen8, Thealbear, FireTown, Addbot,
DOI bot, SyNNeR6x3, Maestra222, GreenSarah, Jncraton, Greencanoe, Mwright2, Morning277, Pauljraybould, Earthmonger, Debresser,
5 albert square, TinyHelmsman, 2boceanpitcher, Yobot, Ndizi, Rachel mountain, Kittyhawk2, AnomieBOT, Jim1138, Joel Amos, Ci-
tation bot, Shcha, Capricorn42, Damiansalandy, Climateneutral, Gilo1969, Goecostore, Andrewkeenan, J JMesserly, Sally1947, J04n,
Hatsarefunny, Rsiddharth, Earlypsychosis, Invest in knowledge, Carrite, Amaury, Adaniels85, GreenGirl23, Fabiena, FrescoBot, Dberler,
Sensible3579, Ovalsoft, BenzolBot, Cannolis, HamburgerRadio, Citation bot 1, Biker Biker, Pinethicket, Tom.Reding, Triplestop, Sky-
erise, Remi11d, Hornernealw, Badgerracing, Trappist the monk, JamesFCMoore, Green08, TheGrimReaper NS, RjwilmsiBot, AF501,
Motojojo, Chicco3, John of Reading, Sterlingbiosciences, Jonlevin33, Vincavec, Lucyjanestrauss, Dcirovic, Jwalenta, F, TobinMarch-
banks, H3llBot, Paulohanlon, JaniceR6778, Shmilyshy, 28bot, TimS TimS, ClueBot NG, HeavenFox, Catlemur, Wilson green, Elec-
tronmicroscope, Luchame, Northamerica1000, Swissking1, Kerrabeth, Therealelizacat, BattyBot, Cyberbot II, Nelsonwill, DeWikiMan,
Hanrysingh, SteenthIWbot, Mariagomsh, Kcannon1, Magikpanda, Bugg t, Anarcham, Ollekransen, KrissyRoe, Monkbot, GraceSDPhilip,
CrispyNugget, Kongmyungjin, KasparBot, InternetArchiveBot, SilverplateDelta, GreenC bot and Anonymous: 307

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