It’s 20 months now since British Airways proudly announced its new scheme to deal with climate change: for the first time, passengers could offset their share of the carbon produced by any flight by paying for the same amount of carbon to be taken out of the atmosphere elsewhere. “I welcome warmly this move from BA,” said the then environment minister, Elliot Morley.
And how much carbon has BA offset from the estimated 27 million tonnes which its planes have fired into the air since that high-profile moment in September 2005? The answer is less than 3,000 tonnes; less than 0.01% of its emissions; substantially less than the carbon dispersed by a single day of its flights between London and New York. The scheme has been, as BA’s company secretary, Alan Buchanan, put it to a House of Commons select committee earlier this year, ‘disappointing’.
The project has failed, according to one well-placed BA executive, because one part of the company wanted to improve its image by going green while another part wanted to protect its image by saying nothing at all about the impact of air travel on global warming. The result was that the scheme was launched and then banished to a dark corner of BA’s website.
That tension – between the demands of the planet and the imperatives of commerce – lies at the heart of the global response to climate change and, in particular, of carbon offsetting. The idea that we might cancel our own greenhouse gases by paying for projects which reduce the gases elsewhere was born in the early years of climate politics. It was adopted by the corporate lobby at the Kyoto summit in 1997 and has now grown into a large but deeply troubled adolescent – confused, unpredictable, and difficult to trust.
Separately from the ‘compliance market’ on which nations and corporations trade carbon credits in an attempt to hit their Kyoto targets, there has grown a smaller, voluntary market in which airlines, banks, car makers and energy companies queue up to offset their carbon and to encourage their customers to do the same. A Guardian investigation suggests that many of the schemes on offer here are well-meaning but thoroughly unreliable.
* One company, Equiclimate, which is run by Christians and recommended by government, has sold thousands of tonnes of offset which are now worthless in financial and environmental terms. It bought up some of the special permits which allow European companies to emit specified amounts of carbon. The idea was to sell them to customers who would ‘retire’ them, thus cutting the amount of carbon which those companies could produce. But the EU Commission distributed 170 million too many of the permits and so the thousands which have been bought by Equiclimate’s customers make no difference at all. Well-meaning people may believe they are offsetting the emissions from their patio heaters by signing up to the Calor Gas offsetting scheme, but the sad fact is that Calor Gas is relying on 5,000 tonnes of EU permits which it bought from Equiclimate when most of the permits were already worthless. “We chose them because they were recommended by government,” a Calor Gas executive said.
* The British government itself has been caught out over emissions from its presidency of the G8 in 2005. The then environment secretary, Margaret Beckett, said that all carbon emissions from all meetings and travel linked with the whole one-year presidency would be neutralised. Delegates to the Gleneagles summit in July 2005 were given official certificates declaring that all their carbon emissions were being offset. But it hasn’t happened. The plan was to spend £150,000 in Kuyasa, a suburb of Cape Town in South Africa, refitting shack-like homes with insulated rooves instead of corrugated iron, providing solar panels for electricity and long-life bulbs for light. But the project, which would cut carbon emissions as well as helping some very needy people, has run into a series of bureaucratic, financial and practical problems. The environment department, Defra, says it is keeping it under review. The project’s leader, Shirene Rosenberg, says she is is still fighting to keep it alive with no start date on the horizon.
* Following a phone call from the Guardian, the Science Museum has withdrawn its Climate Relief Gift Pack, which included a certificate offsetting 100 kilos of carbon and an opportunity to offset a tonne more. The pack promised to “instantly reduce the amount of CO2 emitted into the atmosphere and help reduce global pollution.” This was genuine nonsense. The offset, like Equiclimate’s, was based on buying and ‘retiring’ EU carbon permits whose supply easily exceeds demand. It was also genuinely over-priced. While the Science Museum was offering them at a price of £30 a tonne, EU permits were for sale at only 19p a tonne. The company behind the scheme, Moon Estates of St Austell in Cornwall, withdrew the product from sale on its website at the same time as the Science Museum did. A company executive admitted they had sold some 3,000 tonnes, at a potential total price of £90,000.
* Atmosfair, a German offsetting group which is particularly well regarded for its commitment to the environment, undertook to re-write a section of its website following a phone call from the Guardian. Since 2004, it has been offering air travellers offsets which carry the Gold Standard awarded by a Swiss-based group backed by dozens of environmental NGOs. In an uncertain market, this Gold Standard is now highly desirable. But none of the five projects on which Atmosfair is relying has yet produced a single verified Gold Standard reduction in emissions. One project was never intended to reach Gold Standard; one has been withdrawn; one is stalled. The remaining two – solar-powered kitchens in India and energy from palm oil waste in Thailand – are up and running, but neither of them has yet completed the Gold Standard process. Atmosfair’s founder, Dietrich Brockhagen, acknowledged that what he was selling was ‘forward’ credits even though the two projects might fail finally to generate them. “You have a point, that the customer might not understand this,” he said.
The problem with off-setting is two-fold. First, these schemes which are available to individuals and companies on the open market, are entirely unregulated and wide open to fraud. There is nothing but the customer’s canniness to stop a company claiming to be running a scheme which does not exist; claiming carbon cuts which are wildly exaggerated; selling offsets which have already been sold; charging prices which are hugely inflated. EasyJet, the cut-price airline, backed out of offsetting in April on the grounds that “there are too many snakeoil salesmen in the business.”
Second, as all the examples above show, even the most well-intentioned schemes suffer from basic weaknesses which are embedded in the foundations of the idea of carbon off-setting – an idea which flows not from environmentalists and climate scientists trying to design a way to reverse global warming but from politicians and business executives trying to meet the demands for action while preserving the commercial status quo. It fails on at least three essential points.
First, it requires an accurate measure of the emissions to be offset. That turns out to be riddled with uncertainty. The UN’s Intergovernmental Panel on Climate Change found a margin of error of 10% with measuring emissions from making cement or fertiliser; 60% with the oil, gas and coal industries; and 100% with some agricultural processes. The popular business of measuring emissions from aircraft is especially fraught with disagreement about what exactly should be measured and aggravated by variations in each flight’s height, cargo load and weather conditions. When Tufts University in Maine analysed off-setting websites, they found emissions for flights between Boston and Frankfurt being calculated at anything between 1.43 tonnes and 4.14, nearly three times as much.
Second, it requires an accurate measure of the carbon saved elsewhere. Most of the earliest offset projects involved planting trees which naturally ingest carbon, a complex and unpredictable process which forbids accurate measurement and which is itself subject to further unpredictable change if global temperatures rise significantly. More recent projects which focus on energy efficiency are even trickier. Carbon Offsets Ltd, another company which is recommended by government, is selling offsets from a South African project known as Basa Magogo. This encourages poor households who make coal fires in perforated cans called imbawulas, to build the fire in a different way: instead of using paper, then wood with coal on top, they are to build them with most of the coal on the bottom, thus producing more heat and less smoke. But how does anybody check how many South Africans have built their fires this way today? And how many imbawulas must burn this way for how long before a tonne of carbon is saved? Hugh Somerville, one of the founders of Carbon Offsets Ltd and clearly genuinely keen to offer a decent service, confessed that nobody had asked this question before.
Finally, the very idea of off-setting relies on what is known as ‘additionality’ – evidence that a carbon reduction would not have occurred in the natural order of commercial life. One of the biggest UK offsetters, Climate Care, which is used by the Guardian, distributed ten thousand energy-efficient lightbulbs in a South African township; offered the carbon reductions as offsets; and then discovered that an energy company was distributing the same kind of lightbulbs for free to masses of customers, including their township, so the reduction would have happened anyway.
The result of these fundamental problems is a crisis of legitimacy in the voluntary market, as offsetters lay claim to certainties which are beyond their reach. Dan Welch, a Manchester journalist who investigated offsetters for Ethical Consumer magazine summarised it neatly: “Offsets are an imaginary commodity created by deducting what you hope happens from what you guess would have happened.”
The early forest projects, so beloved of rock bands, have been discredited. Apart from their inability to make accurate measurements of carbon saved, companies were offsetting emissions which were happening immediately with reductions which would occur only during the 100-year life span of a tree – and without being able to guarantee that the tree would survive that long. One of the first, Future Forests, was selling offsets from a forest at Orbost in Scotland. Customers may have thought that they were paying for new trees to be planted there, but the company’s contract with the forest’s owner reveals that all they were paying for was the right to claim ownership of carbon absorbed from the air by trees which were planted anyway. The Advertising Standards Authority in November 2002 ruled that Future Forests had misled customers into thinking that their offset money would be used to grow new trees.
Some tree-planting projects in Guatemala, Ecuador and Uganda have been accused of disrupting local water supplies; evicting thousands of villagers from their land; seizing grazing rights from farmers; cheating local people of promised income; and running plantations where the soil releases more carbon than is absorbed by the trees. The founder of Climate Care, Mike Mason, told the Environment Audit Select Committee in Feburary: “I think planting trees is mostly a waste of time and energy”. And yet Climate Care relies for some 20% of its online sales on forestry. Mason explained apologetically: “People love it unfortunately.”
The idea of buying and retiring EU carbon permits is becoming equally discredited. The first phase, which run to the end of this year, are now worthless. The second phase, due to cap the carbon emissions of European companies from 2008 to 2012, are high-risk investments. Nobody knows whether the EU Commission has got its calculations right this time. Nor can anybody forecast the demand for carbon-heavy production which will fluctuate with the weather and the economy. Andreas Arvanitakis who monitors the market in these permits for the specialist analysts Point Carbon, is committed to climate change and would not use them for offsets: “I have a completely green tariff, I offset my flights and I make sure that I am getting the absolute top stuff. I wouldn’t touch this.”
Projects which use renewable energy or efficient energy to cut carbon are beset with the uncertainties of measurement and additionality. And many companies are selling speculative ‘forward’ credits: they have hooked up with some new third-world project and have started selling offsets on the assumption that the project will probably materialise and succeed.
Defra wants to rescue the market by introducing a voluntary standard. But its credibility is low. In January, it recommended the services of four named companies, including Equiclimate with its worthless EU permits and Carbon Offsets Ltd which had not even started business at the time.
One measure of the crisis in carbon offsetting is the progress of the Gold Standard scheme which is backed by Greenpeace and other environmental groups as a particularly rigorous process to ensure that emission reductions are verified, additional and consistent with sustainable development. When the scheme was launched three years ago, it was widely derided. Jasmine Hyman, the Gold Standard marketing director, said: “The irony is that three years ago, we were defending our right to exist and everybody was saying ‘Stop it with all your rules’ and now we are the darling of the dance floor. ” The scheme has registered seven projects, two of which so far have produced some 350,000 tonnes of verified Gold Standard carbon reductions. And suddenly, as so many other projects struggle with uncertainty, it has unfilled orders for eight million more.