Carbon offsetting is not a new concept, but the escalating climate crisis has brought this practice to the forefront. Businesses are looking for ways to minimize their negative impact on the environment, and carbon offsets offer a solution to this problem. Increasingly, consumers are becoming more discerning, looking to support businesses who are transparent about their sustainability efforts and have processes to mitigate their emissions. Carbon offsets, then, are becoming a popular way for businesses to achieve carbon neutrality.
Carbon offsets are created when someone pays another person or entity to reduce their own emissions or prevent additional pollution from occurring. This allows them to balance out any negative impacts that their actions may cause on the environment. When you buy carbon offsets, you're helping someone else do something positive for the environment, so it's almost like an exchange of services between two parties: one party is paying another party for services rendered (in this case, reduction of emissions).
So how does this process work? Carbon offsets are achieved when carbon dioxide emissions are reduced, or "offset," through projects that either prevent carbon dioxide from entering the atmosphere (e.g., planting trees or investing in renewable energy), or that capture and store carbon dioxide already in the atmosphere (e.g., carbon sequestration). The goal is to achieve a net zero emission of carbon dioxide.
In theory, it seems like a great solution. However, when you look at the details, things start to get a little more complicated. In fact, many would argue that they are ineffective at best and downright harmful at worst.
Carbon offsets are most commonly used in the context of tree planting or the establishment of new green areas. Everything looks to be in order on the surface. But what if the forest is cut down in a few years to reclaim the timber? What if a forest fire destroys that woodland? If you’re not taking active steps to remedy the situation, you’ll end up polluting the environment more than you would have without purchasing the carbon offset! Good intentions can quickly lead to undesired outcomes. For instance, The New York Times reported that more than 150,000 acres of woodlands that had been put aside as part of the state's carbon offset program were destroyed by wildfires in California last summer. What then?
A second aspect of these offsets is the widening disparity that it leads to. Most offsets are purchased by countries or companies that promote or are living a highly consumerist lifestyle. With little or no regard to the environment, they exhaust their quota of emissions – and on the basis of their accrued wealth – buy these offsets from the relatively less developed countries, who are expected to resort to conservation efforts, while also struggling for their survival. While the countries selling offsets may resort to conservation efforts in the short term, their own survivalist pressures mean that oftentimes, conservation efforts are neglected over the medium to long term. The net result ends up being greenwashing, and the discrepancies are swept under the rug.
The only feasible solution? Tackle the root cause of the issue. Eliminate the need for offsets to begin with embedding sustainability into your business. This will ensure that the skewed development that exists in the world today is eliminated, giving lesser developed nations the bandwidth to focus on providing better facilities and ensuring optimum deployment of their resources for the sustainable development of their population.
To do this, you’ll need to think about how to eliminate your consumption of excess carbon. Some carbon consumption is inevitable and that’s okay, but by promoting local activities and by inspecting supply chains, you can take steps to reduce your overall carbon footprint significantly. This will remove the need for carbon offsets and this topic, which is highly subjective, will become redundant. In my opinion, carbon offsets should be replaced by the elimination of all unnecessary carbon consumption. All other tools are merely feel-good measures that don’t tackle the real problem.
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Dr. Kumar Iyer
Sustainable Strategy Mentor