Britain’s climate change advisers have warned against the use of cheap carbon offsets by companies to meet net zero targets, arguing it would curb their efforts to cut emissions and slow the delivery of climate goals.
Carbon offsetting allows companies to compensate for their own pollution by purchasing credits from projects around the world that reduce or avoid greenhouse gas emissions, typically involving things like tree planting or nature restoration projects.
Offset credits, currently trade in an unregulated, voluntary market with many different standards and approaches. Many UK listed companies such as Shell already bypass carbon credits, instead setting net zero emission targets, such as by 2050.
The current low price of many offsets, which can be purchased from exchanges for less than $4 a tonne of carbon dioxide, are providing a cheap way for companies to meet net zero goals which could reduce the incentive for them to directly cut emissions, a report by Britain’s Committee on Climate Change (CCC) said.
“Offsets can mask insufficient efforts from firms to cut their own emissions, they often deliver less than claimed and they may push out other environmental objectives in the rush to capture carbon. The government should require businesses to reveal how much their targets rely on offsets as well as the type and quantity of credits they are using.”
“Britain should use its influence to advocate for strengthened global standards for carbon credits. More work is also needed to ensure emission reductions are not counted twice, once in the host country where the emission reduction has taken place and then again by the company using the credit to meet its own target, called double counting.”
Chief executive of the CCC Chris Stark added: “Businesses want to do the right thing and it’s heartening to see so many firms aiming for early net zero dates. But poor-quality offsets are crowding out high-integrity ones. Businesses face confusion over the right approach to take.
“There is a clear need for the government to make standards stronger and point businesses towards an approach that prioritises real emissions reduction ahead of offsetting. Those businesses that choose to support the economy-wide transition to Net Zero should get the credit they deserve.”
In an attempt to reduce confusion over which offerings are legitimate, Salesforce, the American cloud-based software company, is launching its own carbon credit marketplace that will combine offset providers and rating agencies.
The company claims that the platform “can play a critical role in an organisation’s comprehensive climate strategy” allowing businesses to invest in reliable and effective projects easily.
