Becoming carbon neutral used to be a popular option for businesses looking to demonstrate their commitment to environmental improvement. Let’s face it, buying a carbon offset is a lot easier than investing time, money and resources in practical actions that reduce one’s carbon footprint directly.
But following a number of negative reports on carbon offsetting over the past 3-4 years, the idea of going carbon neutral has lost momentum somewhat.
In this article I discuss whether organisations should consider the carbon neutral path as part of their carbon management strategy.
In particular, I discuss:
- What carbon neutrality is?
- How it can be applied as a useful component in a carbon management strategy?
- How to identify good carbon offset programmes?
What does carbon neutrality mean?
The term carbon neutral refers to the achievement of having a net zero carbon footprint. This is usually achieved by balancing a measured amount of carbon released with an equivalent amount sequestered or offset by buying carbon credits.
Typically an organisation achieves carbon neutral status by measuring their direct and indirect carbon footprint and then purchasing an equivalent carbon offset through companies like Carbon Neutral, Climate Care and Carbon Clear.
What are carbon offsets and carbon credits?
Carbon offsetting refers to the reductions in emissions made in one place which is used to offset emissions in another place. For example, an organisation’s activities results in carbon emissions which can be offset by buying carbon credits from a project that has been setup to reduce emissions.
Typically these projects are based in developing countries where financial support from the offset market supports the development of the project and reduction of emissions. For the offset to be valid the project needs to demonstrate that the emissions savings would not have otherwise been achieved without the financial support of the offset scheme.
Most projects are based around renewable energy generation (i.e. wind farms or wind micro-generation, solar, biomass energy) or are energy efficiency related (i.e. solar water heaters, energy efficient lighting etc.).
The offset market is split between the compliance market which provides regulated offsets for government or international cap and trade schemes (i.e. heavy industry companies that fall under Appendix 1 of the Kyoto Protocol).The other offset market is unregulated and provides voluntary offsets for companies or individuals who would like to offset their emissions.
When does it make sense to buy carbon offsets and go carbon neutral?
The idea of going carbon neutral became very popular in the earlier 2000’s as organisations liked the concept of purchasing carbon offsets to achieve the benefit of claiming carbon neutrality.
However, as the voluntary carbon offset market matured it became evident that there were many carbon offset companies and schemes that were poorly designed and executed. Without regulation the market became flooded with “sharks” offering cheap carbon offsets to organisations hoping to achieve carbon neutral status.
The backlash from the media and the public was harsh and undermined the validity of the carbon offset market and the idea of carbon neutrality. Moreover, many critics see carbon offsets as a way for organisations and individuals to carry on as usual without changing behaviour.
My view is that carbon offsetting can form part of an effective carbon management strategy, and if implemented correctly can quite fairly be used to help an organisation claim carbon neutrality. Here’s how.
A comprehensive carbon management strategy should cascade through a number elements before an organisation considers carbon offsetting. The diagram adjacent shows an effective carbon management cascade strategy:
Measurement: As the old adage goes, ‘you can only manage what you can measure’. Measuring your carbon footprint should be the first step in your carbon management strategy. Here is an article which shows you how to calculate your carbon footprint.
Mitigate / reduce emissions: Investing time, money and resources to mitigate and reduce your carbon footprint should be the second step in your carbon management strategy. There are many low cost ways to reduce a carbon footprint as well as some effective technologies that can be deployed and have sensible payback periods. Here is an article which discusses my favourite 5 ways to reduce a carbon footprint.
Monitor: Once you have measured your carbon footprint and taken actions to reduce it you should actively monitor the impact of the changes / initiatives you have put in place. I typically advise organisations to go through this cycle of measure, mitigate, monitor for two consecutive years before moving onto the forth step of the carbon management cascade.
Offset: Once you are satisfied that you have a good handle on your carbon footprint measurement and have taken significant action to reduce it, you will find that there is still a residual amount of emissions that result from your organisational activities. These emissions are usually very difficult to avoid or mitigate without significant investment. Your only option then, should you wish to go carbon neutral, is to offset. At this point you need to decide what type of offset to buy to achieve the most ‘bang for your buck’.
What type of carbon offsets should I buy?
As I mentioned earlier, not all carbon offsets are made equal. Finding good carbon offsets requires some research into the market and probing into the offset broker’s operations / backed projects. The guiding principles are however the same.
- Good offset projects will have been verified and certified by a recognized organisation (i.e. they will come with some quality assurance). Standards include the Voluntary Carbon Standard, Green-e Climate, Chicago Climate Exchange and the CDM Gold Standard, the latter of which expands upon the requirements for the Clean Development Mechanism of the Kyoto Protocol
- Good offset projects will have additional co-benefits over and above the reduction in carbon emissions. Co-benefits include income generation for the community involved in the project, capacity building and wider social benefits
- Good offset projects will have transparent pricing. My general rule of thumb is that you pay for what you get. Cheap offsets are usually not worth the paper they are written on. In the long-run it is better to pay a little more and get the assurance that you are purchasing a quality offset
Should I claim to be carbon neutral?
Claiming carbon neutrality can be a great way to demonstrate your commitment to environmental improvement. However. like all claims, you need to be very clear on what you are saying and confident that you can back your claim up. I believe if you follow the carbon management cascade strategy you will have a very credible story to tell about your carbon neutral status.