Environmental Indulgences: The Problem with Carbon Offsets

If you were to ask a major oil company what steps they were taking to avoid the climate crisis, you would likely be bombarded with information about their investments in renewable energy, how they are increasing their use of natural gas, and maybe even about how they endorse certain carbon pricing schemes. The main talking point, however, would probably concern carbon offsets.

Carbon offsets are typically credits representing a one-ton reduction in carbon dioxide emissions. Individuals or companies purchase carbon offsets in order to reduce or neutralize their carbon footprint. The money used to purchase these offsets is invested in clean energy companies, used to protect an acre of forest, or for some other “green” purpose, thereby reducing the amount of carbon in the atmosphere.

The danger in these carbon offset schemes is that many of the programs are ineffective or would have happened anyway, allowing corporations to continue polluting while claiming to have negated their impact on the environment. Companies like French oil corporation Total are able to claim that their actions are carbon neutral because they invested in a Chinese wind farm that has been operating for over ten years. Despite the fact that this wind farm has been successful for more than a decade, Total is still able to claim the reduction in emissions.

The track record for carbon offset programs is abysmal. The Kyoto Protocol established several mechanisms for carbon offset programs, including the Clean Development Mechanism (CDM) and Joint Implementation. CDM projects are conducted in developing countries with no reduction obligations, while Joint Implementation projects are carried out jointly in countries committed to emission reduction targets. A 2016 report for the European Union found that only about 2% of the projects in the Clean Development Mechanism were likely to deliver on their promised reductions in carbon emissions. Similarly, a 2015 Stockholm Environment Institute study found that 75% of the credits in the Joint Implementation carbon offset system were unlikely to result in real reductions in carbon dioxide, and stressed that hundreds of millions of tons of carbon dioxide could have been stopped from entering the atmosphere if companies had simply cut their carbon emissions in their factories.

Carbon offset projects also have a long history of hurting indigenous people. Forest programs are some of the most ineffective at reducing carbon emissions, as large portions of “protected” forests in the Global South are cut down. Furthermore, even if certain sections of protected areas are actually left alone, loggers will simply just destroy another acre, leading to no reduction in carbon emissions. The major problem with these projects, however, is that indigenous people are often removed from their land in order to “protect” the forests from ecological degradation. Amnesty International reported in 2018 that the Sengwer people of Embobut forest in Kenya were violently evicted from their ancestral lands in the name of reforestation linked to carbon offset programs. Indigenous people have a right to their land, and any attempt to take it from them should be discouraged, even if it is disguised as an environmentally friendly policy.

These offsets are also often incorporated into cap-and-trade schemes. Cap-and-trade programs place a price on carbon and sell permits to firms that allow them to emit a certain amount of carbon dioxide. Firms are allowed to trade permits with each other as well. California’s cap-and-trade system allows companies to offset a portion of their emissions by investing in reforestation projects. While cap-and-trade systems are relatively ineffective in their own right, they become doubly so with the incorporation of carbon offsets.

As President Biden attempts to deliver on his climate policies and encourages greater corporate environmental responsibility, we can expect to see a resurgence in the popularity of carbon offsets. Unfortunately, the free market is incapable of protecting the environment, and merely poses a distraction to necessary systemic change. Luckily, there is an extremely simple way to mitigate the effects of the climate crisis- stop burning fossil fuels. If President Biden truly wants to protect America from the worst of rising sea levels and oppressing heat waves, then he must take strong action to regulate and limit the actions of industry, and invest federal funds in expanding energy grids and effective renewable energy projects.