Companies with high carbon footprints around the world have made pledges to reduce carbon emissions, aiming to become carbon neutral and even carbon negative.
The solution they are turning to is ‘carbon offset trading,’ which allows them to invest in environmental projects as a counterweight to their carbon-emitting industrial activities.
But carbon offset markets’ increasing popularity has met with controversy about corporations absolving themselves without contributing to an overall reduction in emissions, and questions about how they can ensure the schemes’ success without physically visiting the projects.
In this video, Mongabay explains if carbon offset markets really do work.
Thousands of companies around the world have made pledges to reduce carbon emissions in the coming decades in response to the climate crisis, including initiatives to reduce reliance on carbon-heavy industries, reducing deforestation-related emissions, recycling and even linking executive pay to carbon emissions reductions.
Some firms — such as Adidas and Volkswagen — have pledged to achieve “carbon neutrality” by 2050, prompting investment in schemes aimed at carbon removal, capture and storage, as well as shifts into less carbon-intensive products. Car manufacturers, for example, have pivoted towards producing electric vehicles. But even arguably cleaner supply chains such as these have negative environmental impacts and significant carbon footprints. So where do companies such as these turn when they are looking for ways to offset their emissions?
One solution that has soared in popularity in recent years is carbon offset trading, a burgeoning market that according to one estimate is expected to be worth $50 billion by 2050. Carbon offset markets allow companies to invest in environmental projects, usually designed to reduce future emissions, as a counterweight to their carbon-emitting industrial activities.
With carbon offset markets’ increasing popularity has come rising controversy, as come critics see the practice as little more than effective public relations programs allowing corporations to absolve themselves without necessarily contributing to an overall reduction in emissions. To demonstrate that offset schemes are effective, they need to show that any reductions in emissions are additional to what would have occurred without the scheme in place. This is a difficult task that has led many offset providers to guarantee emissions savings, while others have made speculative investments in offset projects, selling the carbon savings after the fact.
But how can companies or individuals be sure the schemes they are investing in meet their needs without physically visiting the projects they invest in? As the voluntary offset market has grown, several written standards have been developed, such as the VCS and VGS, that include independent audits. But despite these protections, researchers have found irregularities and flaws in numerous offset schemes.
Watch our short explainer video above to find out more.
Banner image of a power plant by Johannes Plenio via Unsplash.