What is the problem with carbon offsetting?

Plus, when trees and plants die – whether from fires or logging or simply old age – most of the carbon they have trapped in their trunks, branches and leaves returns to the atmosphere, so the risk is that trees planted as part of offsetting projects could become a source of emissions if they die prematurely.

Indeed, research by Unearthed into 10 forestry projects used by airlines found that offset projects often only last several decades, and therefore cannot be claimed to be a permanent solution.

The low cost of carbon offsets

Yet, the very low price of offset schemes means they may provide an easier option to reduce ‘net’ emissions compared to more expensive direct actions. As the CCC report explains, current carbon credit prices have been put at around £3-5/tonne, which is much lower than the costs involved in abating emissions in manufacturing and construction (which is expected to cost around £65 per tonne in 2035), and in non-residential buildings (£175 tonne in 2035).

It’s the same for individuals. A study by Transport & Environment found that one transatlantic return flight creates the same volume of emissions as an EU person uses to heat their home for a whole year, and yet one airline gives its customers the opportunity to ‘offset’ this impact for just £3.50.

Voluntary carbon markets allow companies and individuals to purchase offsets voluntarily

These low prices stand to disincentivise business efforts to reduce emissions at the source, as well as mask insufficient efforts to do so. According to the CCC, many companies that use carbon credits do not specify what activities are being ‘offset’ and largely rely on carbon credits for their net zero claims. Indeed, out of the 35% of the FTSE350 whose emissions reduction plans include the use of ‘offsets’, the vast majority did not specify what kind of carbon credit project would be used and did not specify what activities would be ‘offset’ beyond ‘residuals’ or ‘hard to abate’ emissions.

Ultimately, the science is clear that we cannot rely on offsets alone to mitigate the climate crisis. Recent estimates suggest that globally, land-based measures could deliver 20-30% of the overall mitigation required to achieve the Paris Agreement goal of keeping global warming increases below 1.5C. Offsets therefore need to be seen as complementary to decarbonisation efforts, and not as substitutes.

Wider consequences of carbon offsets

Because it is usually cheaper to set up offsetting projects in the Global South, they may come at the cost of indigenous peoples’ rights, or monopolise land that would be better used for meeting local community needs. For example, Amnesty International found that the Sengwer people of Embobut forest in Kenya were violently forced from their homes and dispossessed of their ancestral lands as part of a government plan to reduce deforestation. The Sengwer people were moved without consultation and without giving consent, which is a violation of both Kenyan and international law. 

Meanwhile, campaigners have expressed concern that many offset projects rely on the proliferation of monocultures, which can cause an imbalance in the biodiversity necessary for ecosystem resilience in the face of climate change.

Carbon offsetting and greenwashing

As there are no rules or legislation around the way companies have to communicate their decarbonisation efforts, many will lean heavily on their use of offsets to claim that they are ‘carbon neutral’ or even net zero, which is essentially greenwashing.

However, this is gradually becoming less common as people gain more understanding of the climate issue, and because environmental organisations are taking steps to hold companies to account. ClientEarth, for example, recently filed a lawsuit against airline KLM for its ‘Fly Responsibly’ advertising campaign, which encouraged customers to buy carbon offsets to reduce the impact of their flights.

ClientEarth lawyer Johnny White said at the filing: “Trying to reassure customers on the false premise that a small payment to tree planting projects or ‘sustainable’ fuel contributions compensates for flight emissions undermines urgent climate action, is gravely misleading, and, the claim argues, is unlawful.”

To mitigate this greenwashing issue, the CCC recommends that government should provide a clear definition of what a net zero business really is, noting that: “A business or organisation should only be considered to be net zero when it has reduced its emissions as far as possible to be at or close to zero and permanently removed C02 from the atmosphere to compensate for any remaining emissions.” It also suggests that government should require UK businesses to disclose their reliance on carbon credits and improve transparency about their emissions reduction efforts in general.