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3 myths about carbon offsets, busted

© Adrián Portugal

This post was updated on November 4, 2021.

Do we really need to talk about carbon offsets?  

Yes: They’re in the news a lot lately, and it’s time we talked about them.

Fine. What are they again? 

Let’s start with the basics.  

Deforestation — a major driver of climate change — is driven by financial incentives: If you cut down a tree, you can sell the wood to buy things and plant, say, lucrative crops in its place. 

What offsets do is to change the math by creating financial incentives for protecting forests, essentially making the trees more valuable alive than dead. By paying people to keep carbon-absorbing forests alive, you can compensate for carbon pollution made elsewhere, while protecting wildlife and local communities in the process.

That … doesn’t sound that simple. 

It’s pretty complicated, actually, and it took some time to figure out. Early forest-carbon offsets projects didn’t always achieve their hoped-for climate impacts, but two decades’ worth of research, policy work and independent review have helped ensure that offsets — when done correctly! — can have a legitimate and lasting impact on the climate.

We’re going to need these offsets, too: Science shows that protecting and restoring nature will be essential for meeting the goals of the Paris Agreement, and paying for offsets is one way to fund actions that protect nature. 

Then why are so many people against them? 

The same reason that the film “Inception” was so polarizing: It’s confusing, and nobody can agree whether it had a happy ending. Plenty of well-intentioned people are really concerned by offsets, and not without reason.  

I don’t suppose you’re going to tell me what those reasons are? 

Sure — well, the big ones, anyway. Let’s start with permanence

What’s ‘permanence’? 

Permanence refers to how long the climate impact of a forest-based offset can last.

It’s a legitimate concern: After all, after you’ve paid to offset part of your carbon emissions, what’s stopping the landowner from pocketing your money and cutting the trees down to build fancy condos, or one of those trendy stores that only sells three shirts? What’s stopping a newly elected government from paving over the forest you paid to help protect? Or what happens if a wildfire takes out part of said forest?

Yikes. That sounds dicey. 

It does! But the reality is more complicated — and less disastrous — than people think. 

Explain yourself. 

A lot of critics argue that the risks around permanence mean that forest-carbon projects are not worth attempting at all. This, according to Maggie Comstock, a climate policy expert at Conservation International, is a dangerous misconception.

“Imagine that you are in the market to buy a house,” Comstock says. “There is a risk that the house may someday catch on fire. The response to this risk is not to avoid ever buying a house. Rather, the response is to manage this risk by buying insurance and undertaking fire prevention actions.” 

That makes sense, I guess. What kind of ‘insurance’? 

There are two main “insurance policies” that protect permanence of forest-carbon offset programs: safeguards and buffers.  

Safeguards, broadly, are any measure intended to promote benefits and minimize harm. Under the REDD+ initiative — short for “Reducing Emissions from Deforestation and forest Degradation,” a UN-backed framework for forest-carbon credits — seven types of safeguards have been established to address issues such as land tenure, Indigenous rights (more on that in a moment), and, yes, the risk that a protected forest could be damaged or destroyed.  

The other insurance policy: buffers. Verra, a nonprofit that certifies carbon emissions reductions, offers a useful definition here. 

 

Essentially, buffers work by requiring forest projects to set aside a percentage of the emission reductions and removals achieved. These “buffer credits” are managed by an independent entity and can be canceled in cases where deforestation does occur.

So these ‘insurance policies’ can address the permanence problem? 

Yes. 

It’s impossible to eliminate every risk — no matter what you do, your house could catch on fire someday. But you can reduce risks and, if they materialize, address them. No policy is perfect, and nothing in life is guaranteed, but so far, these types of systems have generally succeeded in doing what they need to do, and they’re only getting stronger.  

Okay. But … what if something unforeseen happens to the forest, like, 20 years from now? 

It’s a valid question, but here’s the thing: An offsets project that lasts only 20 years — while not ideal — is still almost always better than not having done the project at all.

Let’s bring the experts back in here.  

“Even if you were to protect a forest for 15 or 20 years, and then deforestation resumed at the same pace — that is, business as usual — or lower than it was before, that’s still a net climate benefit,” says Conservation International climate scientist Bronson Griscom. 

Why?

Because for two decades, those trees still sequestered carbon where they otherwise would not have; more remote parts of the forest that would have become accessible as a result of the deforestation would have stayed intact; and money would still have flowed into the rural communities responsible for managing the forest. 

Remember way back in the year 2020 when there was all this talk about "flattening the curve" of the COVID pandemic?

We need to do the same thing with forests to avoid reaching the planet’s tipping points, which would result in irreversible climate impacts to a degree humans have never seen. 

Even if some small proportion of emission reductions or removals are reversed, the warming impact of those greenhouse gases will have been delayed enough to help keep us below those tipping points. 

So even a ‘non-permanent’ reduction is a good thing? 

Yes. 

But, and this is a big “but,” the only circumstance in which a temporary reduction in deforestation would not be permanent, according to Griscom, is if that temporary reduction causes an increase in deforestation after the fact. The spike would need to be extreme — higher than the original deforestation rates — to count as a true example of non-permanence. Fortunately, events this extreme are very rare. 

So is permanence overrated? 

No one is saying permanence is overrated! But when you have, as scientists say, less than a decade to stop a climate cataclysm, any dent you can make in carbon emissions is crucial.  

Got it. You mentioned Indigenous rights earlier. 

I did. Here goes: 

Some critics of forest-based offsets speculate that the only way to implement nature-based offsets at scale is through state or corporate control of land. If this happens, it’s bad for the Indigenous peoples who control or otherwise manage more than a quarter of Earth’s land and seas and protect 80 percent of global biodiversity.  

‘Bad’ how? 

To make a long story short, Indigenous peoples have frequently been sidelined from environmental efforts — in some cases even removed from their territories in the name of conservation. So there’s a dark history there. 

So critics say it’s going to happen again? 

Yes — and it could, if society lets it happen. But there are a couple of things working in our favor.

For one, research has repeatedly shown that land under stewardship of Indigenous peoples tends to have far better conservation outcomes — so there’s a very powerful reason to strengthen, not weaken, Indigenous land rights. Also, saying that the only way forward for offsets is corporate control and that Indigenous peoples are going to suffer is problematic. 

How? 

This perspective depicts Indigenous peoples as helpless by diminishing their agency and autonomy. It’s also deeply cynical, implying that humanity has learned nothing from the entire history of the conservation movement and is doomed to repeat the mistakes of the past.  

The fact is, high-quality carbon offsets are necessarily built upon the full and informed participation of Indigenous peoples and local communities, who have much to gain from the financial and technical benefits that carbon offset projects can provide. A major feature — indeed, much of the point — of carbon offsets is restorative justice: a wholesale transfer of wealth aimed at rewarding those who protect nature for everyone’s benefit by acknowledging their control of their lands. 

Got it. So you said there were three myths. What’s the third one? 

Of course: It’s what some call a “license to pollute.”  

What does that mean? 

It means that, for example, a company that pays to offset a portion of its carbon emissions is merely buying the equivalent of a medieval “indulgence” — an absolution for past sins (and effectively a license to continue sinning). 

That kind of makes sense.  

Well, it feels true, doesn’t it? But like most arguments against carbon offsets, it’s simplistic and pessimistic.  

How? 

Because it assumes that there’s nothing we can do, for example, to make rules — as California already does in its emissions trading program, explained here — that cap the percentage of emissions a company is allowed to offset. Like so many of the critics’ complaints about offsetting, it’s that because there are risks, the worst is bound to happen. It ignores decades’ worth of progress on improving safeguards and strictures, and it ignores the reality that companies that buy voluntary carbon credits also tend to make more ambitious emissions cuts compared with companies that do not. 

I didn’t know that. 

Yes, well, that’s not surprising: The narrative around carbon offsets tends to be pretty simplistic. Offsets are necessarily complicated, and the reality is nuanced. 

I guess I can understand that. Are they ‘necessary,’ though? 

Yes: The science is clear that two things need to happen to avoid a climate breakdown. We need to slash carbon pollution, and we need to remove carbon from the atmosphere. Forest carbon projects, if done properly, can help do that immediately by providing the financing needed to ensure governments and local communities keep their forests standing.  

So it’s about the financing? 

Yes! Carbon offsets are so important because they create positive incentives that upend the economic equation that renders tropical forests more valuable dead than alive.  

As Conservation International’s Bronson Griscom writes: “Carbon offsets are essential because they provide a simple way to keep, replenish and expand forests. Once a company or other entity has reduced their emissions as much as possible with existing technology, they can buy credits to deploy the most widely available but underfunded climate technology in existence, photosynthesis, thereby compensating for the environmental impact of energy sources such as jet fuel that do not yet have cost-effective alternatives at scale.” 

So offsets are useful for companies that want to reduce their footprints but can’t yet go all the way. 

Exactly — it’s not intended for, say, fossil-fuel companies to maintain the status quo. It’s for industries and individual companies that are already cutting their carbon but need help to get to the finish line — or beyond.

Remember: Companies are rational actors, trying to maximize efficiency, including on how to cut emissions. So companies are not going to spend money on offsets if there are still cost-effective ways to cut emissions by investing in themselves.

What do you mean?

It’s not in companies’ interest to simply pay for an offset if instead they can pay the same money to make their own business more climate-smart (for example, by improving efficiency to reduce their emissions). In other words, it makes perfect sense that companies that buy voluntary credits tend to already be more ambitious about cutting their own emissions, because it would be irrational for them to not spend money first on themselves (to cut their own emissions) and to only start buying offsets when that becomes a more efficient way to deliver climate outcomes.

Understood. Final thoughts?

Look, we can’t offset our way to climate safety. But offsets just might keep us out of climate danger.

 

Bruno Vander Velde is the senior communications director at Conservation International. Want to read more stories like this? Sign up for email updates. Donate to Conservation International.

Cover image: The Alto Mayo Protected Forest, where a REDD+ project supported by Conservation International has helped cut deforestation in the protected area by more than half, avoiding 8.4 million metric tons of greenhouse gas emissions. Additionally, the project has generated US$ 38 million, which has provided a lifeline for conservation in the region— and the families who live in the forest. Adrián Portugal)


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