Must Read on Offsets

GLOBE-Net News has just published an article, “Searching for true Carbon offsets” that makes many of the same points I have been trying to make, only better. Here is the opening:

The fast-growing carbon offset industry is at risk of being discredited as operators struggle to prove their offsets are actually reducing greenhouse gas emissions. There is unease in the sector amid growing evidence that some carbon offset schemes are of dubious value. Some analysts believe too readily available offsets actually discourage companies from making the investments needed to reduce their greenhouse gas outputs. While the idea of purchasing credits to be ‘carbon neutral’ seems attractive, many are discovering that their dollars have not been well spent. There is an urgent need for a credible standard to differentiate the good from the bad.

Here are more highlights from the article:

An important consideration when purchasing offsets is the principle of ‘additionality’. This means the project must demonstrate it resulted in net emission reductions compared to what would have happened under a ‘business as usual’ scenario. In other words, the emissions reductions would not have been realized without the project.


For example, one of the largest offsetting organizations in the United Kingdom, Climate Care, once distributed 10,000 energy-efficient light bulbs in a South Africa township, only to discover that a local utility was offering the same bulbs free. As the bulbs would have been distributed anyway, the offset project did not meet the test of additionality.

The toughest (i.e. most credible) offset rules are the Gold Standard, which I will blog on shortly at greater length:

One of the most respected set of rules has been developed by the Swiss non-profit Gold Standard Foundation, which offers standards for both CDM and voluntary credits. The Gold Standard establishes requirements that go beyond CDM disclosures, and a certified carbon credit label is issued after adherence has been assured by third party DOEs.

Gold Standard projects require the use of renewable energy and energy efficiency technologies while explicitly excluding reforestation, and the Foundation says these credits can command premium prices on world carbon markets. Many respected environmental groups support Gold Standard offsets, including Greenpeace, WWF, Friends of the Earth, and the David Suzuki Foundation. However, the rigorous requirements have slowed its uptake, say market participants.