Carbon Offset: The Good, the Bad, and the Unexpected

Main Image Source: https://carbonfund.org

The last time you bought a plane ticket – which accounts for 2.5% of our greenhouse gasses by the way – the airline likely presented you with the choice of paying a little extra to carbon offset the emissions of your flight.

But did you have any idea what the offset of carbon emissions would involve?

As businesses across all industries look for ways to reduce their CO2 emissions – either by choice or because they’re forced to by legislation – the uptake of carbon offset programs is gaining worldwide attention. And as more and more companies boast about being partially or even wholly carbon-neutral – they’re also facing increased scrutiny to explain what they’re doing to achieve this.

Since there are so many different activities that produce greenhouse gasses, the methods involved in offsetting them are just as varied. 

And as it turns out, not all carbon offset programs are created equal.

Most people are familiar with the ‘warm and fuzzy’ initiatives such as planting new trees, installing solar panels, or building new wind farms. But there are also lesser-known methods such as restoring soil, improving the efficiency of factories and power stations, and replacing old combustion engines. And then, some approaches seem downright bizarre – such as burning the methane gas produced by landfills and industrial waste.

Yes, you read that correctly.

One of the most commonly-used methods of lowering carbon emissions in the world today is setting fire to methane gas, which converts it into CO2. And if you think that sounds somewhat counter-productive – you’re not alone. But some of these unexpected methods can generate surprising results.

And so, as carbon offset programs grow in popularity, a pivotal question remains: are they actually helping the environment? 

What Is Carbon Offsetting?

In a nutshell, it’s the act of cancelling out the CO2 emissions created in one place with activities that reduce emissions in another. 

As a simple example, a factory in the UK may record its annual carbon footprint, and then pay to plant trees in Africa that will – at least in theory – absorb the same amount of CO2 each year. Even if the factory then continues to pump the same amount of greenhouse gas into the air every year, it can claim to be carbon-neutral.

Common types of carbon offsets include, but are not limited to:

• Tree planting programs, which aim to counteract deforestation and help to absorb more carbon from the atmosphere. Tree planting projects often take place in 3rd world and developing countries and can include planting thousands or even millions of trees at a time. New trees have the potential to absorb incredible amounts of CO2 during their lifetimes – provided they are healthy and remain unaffected by external forces.
• Forest conservation to maintain and preserve existing forests from destruction, particularly in areas such as Brazil, China, and Africa where billions of people still rely on wood for heating and cooking. Offsets can involve direct funds to stop deforestation, providing alternatives to tree-based products, and even supplying fuel-efficient cooking equipment to reduce wood consumption.
• Soil management to improve the health of land areas deteriorated by intensive farming and agriculture. Re-enriching soil enables it to sequester more carbon dioxide from the atmosphere, stimulate healthier plant growth, and reduce nitrous oxide emissions. Management includes planting cover crops to stop erosion, re-enriching soil with nutrients, rotating crops to enhance growth cycles, and reducing human and machine traffic to improve aeration and water absorption.
• Investing in renewable energy, which represents arguably the most effective form of carbon offset, by directly financing renewables which reduce fossil-fuel demand. Unlike tree planting initiatives, solar and wind farms are more likely to be built in the same country or area as the company (or end customer) purchasing the offsets. Renewable energy plants are also guaranteed to have long lifespans and make a measurable difference to emission reductions.
• Energy efficiency programs that can take many different forms, but share the aim of reducing the overall demand for energy. These initiatives include upgrading existing fossil-fuel plants to make them more productive, replacing old combustion engines with new models, and retrofitting buildings to improve power use and lower energy consumption.
• Methane capture and burning, which involves the combustion or containment of the methane gas emitted by farm animals, landfill, and industrial waste. When methane is burned, it converts into CO2 which has a 96% lower greenhouse gas impact. In other cases, methane is captured from landfill (by covering it with soil and then using extraction pipelines and wells) and then used to generate electricity instead of entering the atmosphere.

It easy to see why carbon offsets are such a polarising topic. On the one hand, they can achieve some wonderful things for the environment, and contribute to (or even kick-start) green initiatives that may never happen otherwise. 

But at the same time, they don’t force anyone to change their behaviour. Companies that purchase carbon offsets are not necessarily required to make any other changes to their business practices – as long as they meet their offset targets.

The Positive Effects of Carbon Offsetting

The distinct advantage of these programs is that they’re a necessary step towards addressing the CO2 problem, and when implemented correctly, can deliver tangible results. 

Rather than continuing to pollute without consequence, businesses can take steps to offset their emissions and make real progress towards sustainability. Carbon offset programs can contribute directly to initiatives that help communities and the environment in places that need it the most.

They also have the added benefit of mobilising funds from wealthy nations to developing countries, in a market that is now worth up to an estimated $120 billion. 

“We know we will have to remove a lot of carbon dioxide from the atmosphere, and offsets are helpful in priming that market.”

Cameron Hepburn, Oxford University

The money generated from carbon offset programs enables poorer countries to build green infrastructure, make better use of natural resources, and improve the quality of their land, water, and air.

There’s also the economies-of-scale benefits of putting more money into green industries; helping to reduce the cost of solar and wind farms, or even developing brand new solutions such as direct air capture. This particular technology, which sucks carbon dioxide out of the air, remains unproven on a commercial scale – but has used its extraordinary potential to attract the likes of Bill Gates as significant investors.

The Negative Aspects of Carbon Offsetting

The primary concern many have about carbon offset programs is that, as the name suggests, they’re not solving the problem – they’re merely offsetting it.

Some even liken carbon offsets to the medieval Catholic system of indulgences; paying money to the church in exchange for wiping your sins away.

And while many companies are combining offset programs with real changes to their work practices, others are simply exchanging money for a clean conscience – and continuing with business as usual.

As Naomi Klein, climate activist and author of ‘This Changes Everything’ puts it:

“…even the very best green projects are being made ineffective as climate responses because for every ton of carbon dioxide the developers keep out of the atmosphere, a corporation in the industrialised world is able to pump a ton into the air, using offsets to claim the pollution has been neutralised. One step forward, one step back. At best, we are running in place.”

Naomi Klein, Climate Activist, Author of ‘This Changes Everything’

Tree planting, for example, is not the perfect solution that it may appear to be. Of course, the world desperately needs to restore forest areas that are being destroyed by human activity and record bushfires. Still, when it comes to offsetting a specific amount of carbon, the numbers can be deceiving.

Trees only realise their CO2-absorbing potential when they are fully grown, which can take decades. Young saplings also need careful nurturing and attention to maintain growth, and ongoing protection to ensure they’re not cut down by humans or destroyed by environmental forces. Some tree-planting initiatives may boast impressive numbers – but unless the program includes an ongoing commitment to the trees over their entire lifespan – it may only deliver a fraction of the benefit.

eCommerce Companies Using Carbon Offsets

Online vintage retailer Etsy began a carbon offset program in 2019 to neutralise its delivery and transport emissions. After producing around 135,000 metric tons of CO2 in 2018 – 98% of which was from shipping – Etsy partnered with 3Degrees at a cost of just under $1 million per year. The program involves planting and preserving trees, investing in wind and solar farms, and “developing greener methods to produce auto parts”. Etsy also aims to power 100% of its business operations with renewable energy by the end of this year.

German eCommerce company Zalando also claims it has gone 100% carbon-neutral, via its partnership with Soddo Ethiopia to plant new trees. The online fashion retailer, which boasts revenues exceeding €5 billion per year, also claims that its offices and fulfilment centres in Germany and Poland are now powered by renewable energy.

Retail giant Amazon also lists using carbon offsets as part of its Climate Pledge initiative, although the company doesn’t go into any specifics about what the offsets involve. Amazon has promised to reach ‘net-zero’ emissions by 2040, from a combination of renewable energy, electric vehicles, carbon offsets, and energy efficiency programs.

Canadian eCommerce leader Shopify has also committed to sustainability, pledging an initial investment of $5 million towards carbon offsets, renewable energy, and improved operating efficiency. The company also claims that by the end of this year, 100% of its global services will be powered by renewables.

Five of the Leading Carbon Offset Programs

If you’re an online retailer looking to partner with a carbon offset provider – or you’re a consumer who wants to know exactly where your money is going – here are some details about five popular carbon offset companies from around the world.

1. 3Degrees claims to be the largest supplier of voluntary carbon offsets in the US, working with companies such as Lyft, Expedia, Hasbro, and Etsy. While 3Degrees is involved in renewable energy projects on a broader scale, its carbon offset programs focus primarily on methane capture or combustion and industrial energy-efficiency.
2. ClimatePartner offers carbon offsets to eCommerce companies, including reforestation projects and hydropower investments in Africa, Asia, and South America. Founded in 2006, ClimatePartner provides a trackable ID number that can be shown on packaging and marketing material, allowing customers to track the specific carbon offsets associated with their purchase.
3. Carbonfund offers carbon offsets to businesses of all sizes, including a Carbonfree Shipping Program aimed at transport and eCommerce companies. Carbonfund’s offset projects are centred around reforestation, renewable energy projects, and energy-efficiency programs.
4. Climatefriendly is an Australian carbon offset provider which focusses on farming, soil management, and land regeneration. Working with farmers and local communities, Climatefriendly offers offset programs to businesses and investors and is a member of the Australian Carbon Industry’s Code Of Conduct.
5. Carboncheckout is a ‘crowdfunding’ offset provider that works solely with eCommerce stores. Via the integration of its app, retailers can present an optional carbon offset during the checkout process. The money is then invested in projects such as methane capture and combustion, solar and wind projects, and forest conservation. Each donation is assigned a verification code allowing consumers to see exactly where their money is being spent. Formed in 2015, Carboncheckout claims to work with more than 2,000 eCommerce retailers across 37 countries.

When selecting a carbon offset provider, it’s advisable to ensure their work is verified by a 3rd party. For example, the Verified Carbon Standard program is an internationally-recognised accreditation for offset programs, helping businesses and consumers alike to make smarter decisions and ensure that their investments have a genuine impact.

The Roadmap to Carbon-Neutral eCommerce

Ultimately, the only way to solve the carbon problem is to change or stop the activities that generate CO2 in the first place. 

In the online retail world, achieving true environmental sustainability will require drastic changes to current business operations, supply chains, and logistics networks. 

In the short-term, carbon offsets are a terrific way for brands and companies to set the environmental ship back on an even keel – provided they are implemented in an honest, reliable, and measurable way.

In the long-term, all buildings must be powered by 100% clean energy, recycled packaging must become the norm, and the millions of diesel and gas delivery vehicles on our roads must be replaced with electric models charged by renewables.

And while these ambitious goals still lie a fair way down the road, the mainstream adoption of carbon offset schemes – either by choice or legislation – is a critical step in the right direction.

Here at The Eco Bahn, we’re increasingly optimistic about the journey towards carbon-free eCommerce. Even if an offset program does not guarantee that a company will change its behaviour, it does represent a commitment to turning things around.

And while carbon offsets may not be the solution to the climate problem, hopefully, they’ll buy us enough time to develop better ones that are.