What is carbon offsetting and how does it work?

As you all (may) know, carbon emissions must be halved by 2030 and reach net-zero by 2050. Thus, as planet earth’s citizens, our absolute priority is to reduce the carbon intensity of anthropogenic activities (see our previous blog post on the topic). But what can we do when we reach the limit of the carbon emission reduction potential of an activity? Carbon offsetting is an alternative to adjust your net emissions in the short term.

Simply put, carbon offsetting enables an organization to further act on  its carbon footprint by supporting projects that reduce the amount of carbon in the atmosphere. The organization finances a project that captures carbon or avoids an emission. In exchange, the organization receives a carbon credit that can be accounted for as a decrease in the organization’s net emissions. The credit can be created through different methods. The most well-known example and also the most used is forestry and land-use projects. These projects generate credits based on reforestation, avoided deforestation, improved forest management or ecosystem restoration. The principle is simple: any healthy tree captures carbon and if several project criteria are met, credits are emitted on the carbon captured by the trees. The same mechanism applies for renewable energy, household devices (such as cookstoves and water purification systems), waste disposal or energy efficiency projects (check Tapio’s projects).

The COMACO Landscape Management Project (CLMP) promotes sustainable agriculture and forest conservation in the Eastern Province of The Republic of Zambia. The main objectives of the project are twofold: to sustainably increase smallholder farmer crop yields, income and welfare; and to reduce uncontrolled forest loss and degradation, and increase net forest cover.

The required criteria are standardized across all projects. They ensure that every carbon credit is emitted ex-post, only when the carbon has been captured or avoided. These criteria are commonly referred to as “PAVER”:

  • Permanent: the reduction or avoidance must be perpetual;
  • Additional: the project would not have occurred without the offset project;
  • Verifiable: the project must be able to be verified with data;
  • Enforceable: the credit must be emitted only once, and then retired;
  • Real: the credit must not be emitted due to false accounting methodology

Certifications ensure that these criteria are met and register all the emitted credits. The certifications are granted by international specialized certification agencies, such as Gold Standard, Verra, or Plan Vivo. They guarantee the equivalence of carbon credits: every credit has the same validity, independently of how they were generated. On top of that, they also analyse to what extent each project contributes to a wider social or environmental impact (co-benefits), like the Sustainable Development Goals.

Back in the early 2000s, carbon offsetting was considered a very niche type of initiative for idealistic tree-planters. Nowadays, offsetting carbon has come under the spotlights, with a yearly transaction volume of credits of 100 million tonnes of CO² equivalent in 2020, expected to be multiplied by up to 15 by 2030 and up to 100 by 2050, according to McKinsey and the Network for Greening the Financial System (NGFS)

Note that we are speaking here about the voluntary carbon offset market when organisations proactively decide to offset their emissions. This voluntary aspect differentiates itself from regulated markets of carbon credits such as the EU ETS. These regulated markets work according to different principles, generally through a “cap and trade” mechanism.
In our case, voluntary carbon offsetting works with certified projects that generate credits that can be bought by organizations willing to offset carbon emissions. 

At Tapio, we select the most suited project according to your volume needs and sustainable development preferences. To us, carbon offsetting is an essential tool to compensate for the emissions you cannot abate today. However, when targeting net-zero, you must first focus on your carbon reduction goals using our solutions generator. Carbon credits come second and provide you with a way to correct your trajectory over time while supporting meaningful projects.

Sources:
Taskforce on Scaling Voluntary Carbon Markets
Science Based Targets Initiative
Forest Trends
Gold Standard
Verra
World Bank

Understand the European Green Deal in 2 minutes

In 2015, the Paris Agreements set an ambitious global target to limit the increase in global temperature to less than 1.5°C above pre-industrial levels. The European Union (EU) is the first powerful economic bloc to respond by unveiling the Green Deal, the roadmap for transforming the EU into a fair and prosperous society with no net emissions of greenhouse gases by 2050.

Released in December 2019, the Green Deal (GD) is actually a 27-page document that sets out the timetable for the tasks of the Commission and its members to reduce greenhouse gas emissions by 50 to 55% in 2030 and then achieve climate neutrality by 2050. Various sectors that have a negative impact on the environment will be subject to an in-depth review. Agriculture, transport, mobility, energy, industry, food and other key sectors in the ecological transition are subject to a clear strategy and part of a systemic approach to integrate the objective of prosperity with an environmental objective.

Video from European Commission – “The European Green Deal”

The means deployed by the EU are equal to the task. The EU will deploy a minimum of 1000 billion euros. A sum that will be massively injected into European private and public sector initiatives that support the transition to a sustainable and resource-independent system. A significant part of the budget will also be used to support innovation, research and allow a fair transition for people dependent on polluting activities. With the invested budget, the EU would like to develop a resource-independent green economy.

To ensure the proper implementation of the GD, the union unveiled the climate law in March 2020. The climate law sets the legal framework for the GD by setting out, among other things, the mandatory monitoring measures to which members will be subject, as well as the obligations to integrate the GD objectives into all member states’ policies and initiatives. The Climate Act is in addition to pre-existing initiatives inherent to the GD, such as the European Trade System (ETS), which already limits the emissions of major greenhouse gas producers on the European continent.

Finally, the GD also addresses the EU’s global strategy to become a world leader in terms of climate initiatives. In order to achieve the objectives set by the Paris agreement and to avoid a simple relocation of emissions, the EU is working with other global players. Since the emergence of the green deal, other ambitious climate projects have emerged such as the American Green New Deal or China’s Great Green Reset.

The EU is dependent on its size and complexity resulting in many inconsistencies and greatly slowing down the implementation process. Although criticized, GD confirms Europe’s intention to significantly reduce its impact on the environment. In this context, many companies and organizations will have to review their operating methods in order to compensate but above all to reduce their greenhouse gas emissions. Tapio’s carbon management platform provides a simple, accessible and enjoyable way for companies to be in line with Europe’s objectives and to become a positive actor of change. 

Sources:
https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1588580774040&uri=CELEX:52019DC0640
https://www.iew.be/le-green-deal-europeen-un-changement-de-paradigme/
https://www.theguardian.com/world/2020/mar/09/what-is-the-european-green-deal-and-will-it-really-cost-1tn
https://ec.europa.eu/commission/presscorner/api/files/attachment/859152/What_is_the_European_Green_Deal_en.pdf.pdf