Should we drop the idea of carbon compensation?

“Phantom credits.” That was the term used to qualify over 90% of carbon offset credits issued by Verra’s Verified Carbon Standard (VCS). The investigation conducted by The Guardian, Die Zeit and SourceMaterial (backed up by three scientific research projects) states that the vast majority of credits had little or no benefit to the climate in terms of reducing rainforest deforestation. Verra disputes the findings, judging that The Guardian extrapolated results. If you are not familiar with the technicalities of carbon offsetting, we may have lost you. What do credits relate to in terms of actual ecology? What really happens when you compensate for carbon emissions? And what is going on when credits are found to be “phantom”? The issue merits investigation because money is not the only thing at stake here. There is an ethical question as to how we combat climate change.

‘If I emit a tonne of CO₂ but someone reduces their emissions by the same amount 200 kilometres away, the two cancel each other out in terms of physics and climate’

—Laurent Piermont, founder of the European Carbon Fund

First, some context. Carbon compensation stems from a scientific postulate that where the carbon dioxide is emitted is of no consequence. “It doesn’t matter where you emit the carbon dioxide, its effect on the atmosphere is exactly the same. If I emit a tonne of CO₂ but someone reduces their emissions by the same amount 200 kilometres away, the two cancel each other out in terms of physics and climate,” explains Laurent Piermont, who holds a PhD in Ecology and founded the world’s first non-government carbon fund, the European Carbon Fund, in 2005. The second principle is carbon sequestration, where carbon dioxide is stored in natural habitats such as forests instead of being released into the atmosphere, therefore generating “negative emissions”. Now let’s imagine that by law, I need to reduce my emissions by 10%, but for whatever reasons, I feel I cannot achieve the goal. Instead of reining in my activities, I can pay someone 200 kilometres away to reduce their emissions by the same amount. Then I can claim their effort as mine. That’s how offsetting works, according to the rules agreed in 1997 under the Kyoto protocol. We have made a market out of the fact that it doesn’t matter where emissions take place – we are buying and selling them as a commodity. “However,” says Laurent Piermont, “overall we emit too much CO₂, so compensation only makes sense if everyone makes a big effort to reduce their emissions and saves compensation for emissions that cannot be avoided.” 

According to Piermont, who was involved in the system from the beginning, it has helped reconcile the combat against climate warming with “a liberal approach to the economy”. It’s a winning combination whereby economic interests (which, in liberal theory, act in the interests of most people) can be pursued and money allocated in the best possible way. Sometimes, reducing your emissions by an extra ton…