Is Carbon Offsetting Ethical?

The practice of carbon offsetting is relatively new. Few companies 20 years ago would have heard of such a thing but now there seems to be overwhelming interest in using carbon offsets to help in the process of becoming a carbon neutral company. Having carbon neutral status is considered necessary for a business to be regarded as environmentally sound.

The need for carbon offsets arises because the only way for any business to reduce its impact on the environment by reducing its carbon emissions to zero is to stop doing any work. This hardly makes good business sense, so when a company gets to the point that it has reduced its carbon footprint to the minimum through activities such as recycling, waste reduction, energy efficiency and other measures, its next step is to consider carbon offsets. By buying into carbon offset projects elsewhere in the world, the company can offset the amount of carbon that it produces in its everyday activities and be declared technically carbon neutral.

Are Carbon Offsets Legal?

Definitely. Very large businesses and governments have agreed that carbon offsetting, in principal, is a good thing. Some corporations in the US offset their carbon dioxide emissions by contributing money to set up anaerobic digesters that work on farm waste to produce methane that can then be used as a source of energy. Others buy into large wind farm developments that contribute electricity to the national grid.

Overall, experts think that carbon offsetting could contribute to the reduction in global carbon emissions that are a necessary part of the battle against global warming and climate change.

What is Bad About Carbon Offsetting?

The major problems of carbon offsetting arise because of substandard projects that are being offered in some parts of the world and because of the attitude of a small minority of companies. Some projects take money from big business but may not themselves be energy efficient and the projects as a whole may not even be carbon neutral.

A few companies around the world have been criticised for not doing anything to become more energy efficient, or to participate in their own environmental programs while just buying enough carbon offsets to declare themselves carbon neutral. In the long term, this is unlikely to reduce global warming as carbon offsets are being viewed as a ‘quick fix’.

Another problem that is likely to become worse in the future is the potential for carbon offset projects to be counted more than once. If three companies buy into a windfarm and are given the same ration of carbon offsets, the paying companies are misled into thinking they have offset all of their emissions and the global environment suffers at the expense of the project provider.

Carbon Offsetting Done Ethically

Once a company has reduced its carbon footprint by operational changes, the choice of carbon offset project is then vitally important. Currently, there is no regulation of such projects and no official, globally accepted standards. To be a credible offset project, the company offering this service should be able to show that they do act as a significant carbon sink and that their business would not be possible without the investment of companies seeking to become carbon neutral. It stands to reason that it is of no benefit to the environment to invest in a wind farm that has been up and running for two years. Investing in a new windfarm that would not be built without the investment, an ‘extra facility’ is the most valuable.

Standards for Carbon Offsetting

Although there are not yet any official standards to judge carbon offset projects by, they will be developed over the next few years. Currently, the World Wildlife Fund has a Gold Standard that can be applied to projects that fulfil some very strict criteria. The aim of the WWF standard is to investigate projects to see if they fulfil requirements set by the Kyoto Protocol. This is particularly important for projects in developing countries – if projects fulfil the criteria they are given certified emissions reduction credits (CERs) and can attract large investment from businesses in the developed world. This not only benefits the environment, it brings jobs and financial investment to areas of the world that desperately need it.

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