The life cycle of a product leads to a net release of greenhouse gases throughout its supply chain. CarbonCloud's stance is that the product should not be labelled “climate neutral” even if the emissions are compensated with carbon offsets.
For each project, we need to ask ourselves the following:
- Does the project deliver the intended results? Things do not always go as planned. A large project in Kenya invested in energy-efficient stoves. As it turned out, most of them were never used. Still, climate offsets were certified and sold. For other projects, we will not know the outcome for a very long time. Planted trees, for instance, only absorb and store carbon as long as they are not cut down. How can this be a year-long guarantee in countries such as Uganda, globally top-ranking in corruption?
- Is the project “additional”? In some cases, the project would have taken place anyway, even without the carbon offsetting contribution. Wind power farms, for instance, produce carbon offsets on the assumption that the electricity produced replaces coal power. But many of the countries that host these projects are growing economies with a steadily increasing energy demand. The wind power farms would probably have been built anyway.
Additionality is generally an explicit requirement for a carbon offsetting project. But unfortunately, the analysis of whether a project is additional is often highly subjective and hard to evaluate in a transparent way. A German research study (Cames, 2016) found that only 2% of the investigated projects were highly likely to be additional.
- Is leakage avoided? Leakage is when greenhouse gas emissions increase in another area, because of the carbon offsetting project. If trees are planted on land used by the local population for forage or agriculture, this may lead to cutting other trees down elsewhere: The local farmers may have no other option than to clear vegetation at a new location to continue their agricultural activities. This becomes at best a zero-sum game for the climate but a loss for the farmers who need to move, and a loss for biodiversity since planted forests host less biodiversity than natural vegetation.
- Who takes credit? In the business of carbon offsetting, it is not unusual that more than one party takes credit for the same action, resulting in deceptive bookkeeping. Take the following example: trees are planted in Uganda as a carbon offsetting project. Company X buys the carbon offsets and label their products as “climate neutral”. This means that company X takes credit for removing greenhouse gases. However, it is not unlikely that Uganda also accounts for this tree planting in the national inventories of greenhouse gas emissions. In this case, the action is double-counted. The negotiations of the Paris agreement showcase how difficult it is to agree on rules to avoid double counting. Reaching our climate targets requires that we BOTH reduce emissions in all countries around the world AND remove greenhouse gases from the atmosphere, for instance by planting trees. Double counting blurs our vision and makes it harder to keep track of what remains to be done.
Cames, M., Harthan, R. O., Füssler, J., Lazarus, M., Lee, C., Erickson, P., & Spalding-Fecher, R. (2016). How additional is the clean development mechanism. Analysis of application of current tools and proposed alternatives. Oeko-Institut EV CLlMA. B, 3.
IPCC. (2014). Mitigation of climate change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, 1454.