As climate change becomes an increasingly tangible concern, reducing carbon emissions (or achieving net zero emissions) is quickly becoming a priority. In this series piece we unpack the realities of carbon offsetting - the good, the bad, and the ugly - to show how it can (and can’t) be part of an impactful sustainability strategy for your company.
Last week we detailed the hallmarks of successful offsetting projects. Now let’s take a look at the shadier side of the carbon market...
There is a burgeoning industry of commercial offsetting providers selling carbon credits, specifically VERs, to companies and individuals. Unfortunately, because the voluntary carbon market is not overseen by any regulatory body, the quality of VERs is variable and there is potential for mismanagement or outright fraud. Commercial offsetting providers are often many degrees of separation away from the projects their customers invest in. Rather than being hands-on with projects, they commonly sell carbon credits acquired from other companies and funds who have in turn accumulated credits from individual offsetting projects. The process is opaque from the end customer’s point of view, with little clarity into the credentials of the project they are buying into.
VERs can potentially be issued as the result of fraudulent claims on emissions reductions. Schemes might massage baseline figures to make their projects appear more successful, may pretend to be operating an initiative which doesn't exist, or which exists but which don’t produce any net saving at all, e.g. a forest planting initiative where the land is sold and trees are felled shortly after. The VERs market is chaotic and unpredictable. Sadly, most of the offsets that consumers buy (eg. offsetting flights) are of this nature, where the reality of low emissions reductions can be hidden or distorted.
The carbon market is huge and complex. For every institution paying attention to the quality of carbon credits, there are countless others who aren’t. Many market players aren’t aware of the difference between high and low quality credits, making the market an easy place to hide if you are trading poor quality credits. At this point in the climate crisis, it is deeply unfortunate that it is possible to buy false solutions in the form of dodgy VERs.
How can companies avoid these issues? It is a challenge for the end consumer to sort the wheat from the chaff, and to be confident that they are investing in schemes which fulfil their promises. Are the proposed emissions reductions realistic? Does the project actually exist? Are there any adverse knock-on effects to the local environment or communities? This is where verification and certification becomes important, as it provides a means of quickly gauging the quality of projects and any resulting carbon credits.
About the author:
Helena Maratheftis writes regular content for Converge. She is a creative with an academic background in biology (BA) and the environmental sciences (MSc). Her special interest lies in science communication.
Converge, an AI-based construction technology company, has raised over GBP 15 million to digitise, optimise, and decarbonise construction materials and processes responsible for 11% of global CO2 emissions. The round was led by mission-aligned investor OGCI Climate Investments (OGCI CI), a specialist decarbonization investor, with the participation of TO Ventures, and existing investors.
In this final chapter of our series, let’s take a look at how Converge fits into the sustainability picture, helping your company to move beyond offsetting and towards a greener future.