Offsets Examined

  • Carbon offset programs are gaining in popularity and feature in many net-zero policies
  • However, they aren’t a panacea to the issues of carbon emissions, and can have adverse effects
  • Scottish craft brewer Brewdog is boosting its carbon-negative policy with emissions reductions alongside planting a huge highland forest

The sequestering question

Last February, the Energy & Climate Intelligence Unit (ECIU) reported that nearly half the world’s GDP is produced by countries or regions that have set, or proposed, a net-zero carbon emissions target to be achieved by or before 2050. Before and since, many companies have made similar commitments, especially in the run-up to COP26.

All of these commercial net-zero targets depend, to varying extents, on offsetting carbon emissions. In basic terms, “offsetting” refers to the practice of compensating the emissions of a carbon-emitting activity, like an airplane flight, with a carbon-storing (or “sequestering”) one. Usually, this carbon-sequestering activity involves planting trees, which consume and store atmospheric carbon as they grow.

Offsetting sounds great in principle, but it has a number of key drawbacks which limit its effectiveness, especially when it amounts to no more than tree-planting. Net-zero policies that rely heavily on carbon offsetting should be treated with caution: at its worst, offsetting can amount to counter-productive greenwashing.

Offsets offshore

Climate Home News provides a detailed breakdown of 10 net-zero and carbon offsetting myths, including the important observation that 2050 is an under-ambitious target date for minimising global emissions given that much of the projected carbon capture technology doesn’t yet exist at scale.

Most relevant to the specific issue of offsetting are the ideas that “nature-based solutions” can compensate for fossil fuel emissions, as well as the myth that “tree plantations capture more carbon than leaving old forests undisturbed.” The fundamental issue is that there is a lag between a tree, and especially a forest, being planted and its sequestering significant amounts of CO2, whereas burning fossil fuels emits carbon immediately.

That’s assuming trees are planted effectively. Encouraging natural forest regrowth can be highly effective, but at the other end of the scale poorly thought-out replanting schemes and incentives can have detrimental impacts on ecosystems whilst sequestering limited amounts of carbon.

Global inequity also distorts the incentives for businesses and consumers in wealthier countries. Tree-planting schemes are cheaper in developing countries than in wealthy ones, so many companies effectively offshore their emissions using third-world tree-planting programs. This exhausts these countries’ capacity to achieve their own negative emissions goals, because the required land is bought up by relatively wealthy Western businesses, and creates “moral hazard” for the businesses themselves: i.e., with cheap offshore offsetting programs available, there is no incentive for these companies to reduce their own emissions. Behaviour gets skewed towards long-term carbon removal programs at the expense of reducing carbon emissions immediately.

All companies emit something; eradicating emissions altogether (“gross-zero”) is unachievable, so a degree of offsetting is necessary in order to counter global warming. However, its balance within any given net-zero policy with emissions reductions is key. The carbon neutral protocol defines carbon neutrality as a state “achieved when the GHG emissions associated with an entity, product or activity are reduced and offset to zero,” – i.e., offsets and reductions happen simultaneously, in variable proportions. Net-zero has a subtly stricter two-step definition, the first step of which is to reduce emissions as much as possible before the second step, offsetting any remainders. While this distinction is key, it’s currently businesses’ choice whether or not to adopt these definitions, so even (or especially) when companies are pledging “net-zero” it’s important to look closely at the content of the policies themselves.

Brewing change

The most committed businesses minimise their up-front emissions as much as possible and ensure that their offsets over-compensate for any remainders, by setting carbon negative targets. One high profile example is BrewDog.

The craft brewery’s sustainability report attracted headlines following its release back in August, with many takes dominated by the eye-catching 2,050 acre forest BrewDog is planting in the Scottish highlands and the offset partners the company is using to mitigate its emissions in the meantime. Between them, these initiatives are slated to sequester twice as much carbon as the company emits, earning BrewDog the title of the world’s first carbon negative beer company.

However, besides planting a million trees and restoring 550 acres of peatland, BrewDog is also committing to drastically reduce its carbon consumption in the first instance. The report pledges to source all electricity for UK brewing and bars from local wind farms, capture all CO2 by-products of the fermentation process, and to fast-track the deployment of a fleet of electric delivery vehicles. Malted barley, produced as a by-product of beer brewing, is also to be converted into “green gas” to remove fossil fuel reliance from the process.

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