Do carbon offsets really work?

Almost anyone who’s booked a flight in Australia online would’ve seen the option to pay a bit more to have your carbon emissions offset.

Reducing or offsetting emissions is now offered for a multitude of different purchases across industries, but what does the money actually go towards?

Fees paid to offset carbon emissions go towards projects aimed at reducing greenhouse gas emissions.

Companies calculate the amount of carbon emitted in the creation of a product or delivery of a service such as a flight, and charge individuals who choose to pay it the amount needed for them to cover the cost of counteracting that amount of carbon.

Most people would be aware of tree planting initiatives, but there are a number of different types of projects carried out to reduce the amount of carbon in the atmosphere.

Projects may reduce, remove or capture emissions.

Tasman Environmental Markets (TEM), which operates the emissions offset programs offered to Qantas and Jetstar customers, puts such fees towards rainforest preservation, renewable energy projects and replacing traditional fire stoves in rural households in developing countries with more efficient alternatives.

Closer to home, its projects within Australia include re-vegetation of bushland. It also includes controlled burning in Arnhem Land using mosaic burns carried out by, and informed by, the practices of Traditional Owners, in an effort to prevent larger, uncontrolled wildfires.

TEM estimates its clean energy projects help to avoid 80,000 tonnes of carbon a year and its burning projects have reduced emissions by 3.5 million tonnes of carbon to date.

The company’s executive chairman, Andrew Grant, said when people choose to offset emissions on a purchase, that offer is accredited under the federal government’s Climate Active program.

Declan Kuch is a vice-chancellor’s research fellow at the University of Western Sydney’s Institute for Culture and Society. He is one of a number of people concerned that consumers may not always be getting what they pay for when it comes to emissions offsetting.

“A lot of the international assets follow the pattern aid projects do, where a whole lot of intermediary organisations skim off their own share, and then the actual money that goes to the communities is minimal,” he said.

But Mr Grant said focusing on margins meant people were “missing the point”.

“We have the challenge of meeting these really ambitious climate targets, and offsets need to be supported and nurtured and encouraged,” he said.

The fragility of assets involved in such projects, such as forests full of trees, was highlighted in 2020 when areas where trees had been planted as part of emissions-offsetting projects were impacted by bushfires in Australia.

“One of those forests [Darawakh Wetland in NSW] was completely razed by bushfire, once a forest gets burnt down, the question is, how is that counted? Do you need to then pay for more offsets, who is keeping track of that?” Mr Kuch said.

“If you look at some of the early schemes, there’s simply no information available about the status of those trees, there’s a lot of these forestry credits, and these were developed on the assumption that they’d be around for 100 years.

“There’s no traceability, so it’s very hard to check whether the trees are even standing still, and when they’ve been cut down for some other purpose.”

Mr Grant said offset programs were audited by federal government-appointed auditors to ensure the emissions a person pays to be offset were actually offset and all factors and variables were taken into account in the calculations made within offsetting projects.

“offset programs were audited by federal government-appointed auditors to ensure the emissions a person pays to be offset were actually offset and all factors and variables were taken into account in the calculations made within offsetting projects.”

He also said international standards organisation Verra provided an additional layer of credibility to the work done through offset projects to ensure permanence had been factored in.

“They set the methodologies by which the projects have to abide by and then any issuance of credits under those methods are also audited,” Mr Grant said.

Voluntary offsetting that individuals pay to choose for is a much smaller market than mandatory offsetting that the government requires industry and businesses to carry out.

Somewhere between 5 and 10 per cent of people booking flights in Australia choose to pay to have the share of emissions from their flight offset, according to Mr Grant.

While TEM said it only financed projects that cause additional emissions reductions above business as usual, Mr Kuch said consumers need to make their own judgement on “additionality”.

Additionality is the consideration of whether a project people contribute towards through carbon offsetting fees would have otherwise gone ahead without their money.

“Who’s to say something wouldn’t have happened otherwise?” Mr Kuch said.

Mr Grant said the standards that offset programs must meet require a huge amount of technical rigour and evidence for the life of any project.

“So it’s simply not possible to create a credit that isn’t additional or permanent under the highest possible standards,” he said.

Mr Kuch said if consumers wanted to ensure the offset fees they pay for were credible, they had to do their own research beyond the website of the company they were buying from.

He believes offsetting emissions should only be an “intermediate” method of dealing with high carbon emissions.

“Offsets only, at least in theory, will negate, so they’ll only take us back to zero, when what we actually need is to sequester carbon and to stop digging it up in the first place,” Mr Kuch said.

“The most effective action you can take is not to buy more stuff and then purchase an offset which is probably going to be dodgy, it’s to not burn the carbon in the first place and to campaign against more fossil fuel projects starting up when we’ve run out of atmosphere to burn the carbon into.”

“The most effective action you can take is not to buy more stuff and then purchase an offset which is probably going to be dodgy, it’s to not burn the carbon in the first place and to campaign against more fossil fuel projects starting up when we’ve run out of atmosphere to burn the carbon into.”

Mr Grant said it is simply not possible to achieve emissions reduction targets without offsets.

“Offsets are integral to meeting climate goals of reducing global warming to 1.5 degrees or less,” he said.

“It’s not possible to meet those targets with technology alone and offsets are part and parcel of the natural carbon cycle anyway,” Mr Grant said

While he agrees emissions have to be reduced, he said he sees a future where emissions offsetting programs were just part of the bigger picture.