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Thoughts about carbon offsets

Greg Studen  |  01/29/09 @ 10:06pm

What are carbon offsets? We start with the fact that burning carbon-based fuels (these are the fossil fuels--oil, natural gas, and coal) provides the essential energy to power our civilization. Unfortunately, burning these fuels also pours carbon dioxide (CO2) into the atmosphere, which is causing dangerous levels of global warming. The fundamental approach to solving the problem of global warming is to limit the amount of these fuels that are burned. 

Cutting back on the use of fossil fuels can be accomplished in one or more of three ways:  change the way we live to reduce our need for energy; create greater efficiency in the use of carbon-based fuels; or replace such fuels with alternative technologies, such as solar, wind, nuclear, geothermal, or tidal power. We are now involved in a great worldwide project to realize all of these goals. Meanwhile, a lot of carbon is burned every day, and millions of tons of CO2 are emitted. The idea of the carbon offset is that the amount of CO2 that we generate and put into the atmosphere can be offset, or counterbalanced, by an equivalent reduction in the amount of CO2 generated somewhere else. As an example, as you heat your home, drive your car, or take an airplane trip, you will be responsible for generating an amount of CO2 that depends upon a number of factors, including type of fuel burned, efficiency of the equipment used, and number of miles traveled. This amount of CO2 can be calculated for each activity that you engage in, using a convenient "carbon calculator" on a carbon offset website. For example, see here, or here

 After you have calculated your CO2 output, you can pay a fee based upon the amount of CO2 that you are responsible for generating. A "carbon offset" is a program, usually set up by a non-profit organization, that uses that fee to fund projects that reduce CO2 emissions somewhere else in the world (literally anywhere in the world, because the atmosphere mixes freely around the globe). Emissions are reduced in one of three ways. First, people can use your fee to pay for efficiency improvements that reduce their CO2 emissions. Second, they can engage in activities, like planting trees, that actually take CO2 out of the air and tie up the carbon in solid form. Third, they can invest in alternative energy projects like windmills or solar panels to generate energy without burning carbon-based fuels. If you search for the term "carbon offsets" on the world wide web, you will quickly get a whole list of programs that offer the chance to offset your emissions. Examples of offset programs include capturing methane gas from landfills or farms, funding windmills on farms in the Midwest, and tree planting or conservation tillage to tie up carbon in plants or the soil. The goal is to become carbon neutral by purchasing enough offsets to fund projects that will reduce CO2 emissions somewhere else by an amount equivalent to your own emissions. How do carbon offsets fit into the suite of policies for a long-term solution to the problem of carbon emissions? Are they useful at all, do they have a limited role to play, or is it OK to burn as much fuel as you please as long as you purchase carbon neutrality by investing in an equivalent carbon offset program?The answer to this question is a bit complex. I will approach it in three  parts. The first part addresses the role of carbon offsets in the the long term struggle to reduce CO2 emissions. The second part addresses the way in which a carbon offset program should be structured, assuming that we conclude in the first part that an offset program has a role to play. The third part considers how you should use a carbon program in trying to reduce your own emissions.; in other words, what are the ethics of carbon offsets?Part one: how do carbon offsets fit into the "big picture" of CO2 reduction?  Here the critical issue is the difference between the short run and the long run. In the long run, we have to eliminate at least 90% of the CO2 that is now annually spewed into the world's atmosphere atmosphere. We won't be able to do this unless everybody reduces their fossil use dramatically, and permanently. There simply is not enough offset capacity to absorb all the necessary CO2, if we don't adopt serious reductions in fossil fuel burning; you would in principle have to "re-fossilize" all the excess  CO2 in the atmosphere, or store it underground. There are plans to pursue both these options, but they offer neither the scale nor the timing to provide the needed reductions. Note that the "long-run" in this context is not very far away; scientists tell us that we have to achieve 90% CO2 reduction by 2050 in order to avoid a high chance of disastrous consequences from warming of the climate.

In the short run--that is, in the next forty or so years--carbon offsets can help in two ways. First, they can ease the transition from high fossil fuel use to little or no use by making the necessity of lifestyle changes less abrupt and by helping to keep some of the carbon out the atmosphere while new technologies are developed. Second, they can produce funding for carbon reduction projects, and in particular can direct funding towards projects that help lower-income people and so are good for social development as well as for environmental protection. These benefits make carbon offsets very attractive during the transition period to a low-carbon economy--we just have to keep in mind that they will have to phase out as we adopt permanent measures to replace fossil fuels. The conclusion is that carbon offsets can be a very useful part of the program of creating a low-carbon economy, if they are structured and used in the right way.Before getting into a discussion of the desirable features of a carbon offset program, a further cautionary note is warranted. It cannot be emphasized enough that major actions are needed on a very urgent basis if we are to curtail CO2 emissions to the necessary degree. This means that we must undertake both massive investments and dramatic lifestyle changes (in the developed world--for the underdeveloped world, the problem is how to help them develop without copying our Earth-destroying ways). These actions need to be taken soon, starting now. Because it is impossible to do everything at once, offsets can be a great asset in helping to reduce additional adverse impacts while we go about making the necessary changes. However, offsets cannot be used as an excuse to postpone or avoid these changes. As George Monbiot has said in his very useful book, Heat: How to Stop the Planet from Burning:

"But my main objection [to carbon offsets] is this: that in order to deliver a carbon cut of the size I have discussed, everyone will have to limit their emissions, either today or, in the poorer nations, in the future. There is no choice to be made about whether to abstain from flying or to help poorer people buy better lightbulbs. We must abstain from flying and help poorer people buy better lightbulbs." (page 212)

I disagree with Mr. Monbiot only in the matter of timing: we simply can't get people to abstain from flying on an immediate basis, let alone to change other more fundamental CO2-emitting behaviors, such as eating meat for dinner, heating their houses with natural gas or oil,  and driving to work. So carbon offsets can be quite useful during the transition period--as long as we bear in mind that we are making a transition to a low-carbon economy and lifestyle and work hard at it.With this is mind, what are the principles that should guide the structuring of a carbon-offset program?  First, I'll list the main ideas, and then discuss them:Essential principles to guide an offset program--the "big three":  CO2 reductions that are funded by offsets must be 1. Real and verifiable, 2. Additional, and 3. PermanentDesirable for a good program:  1. Fund energy efficiency and renewable energy projects, and 2. Invest in poor and lower income people and neighborhoods.The three essential elements of an offset program get to the heart of what offsets are all about. They can be best understood by looking at some early carbon offset programs that had weaknesses or outright failures in all three areas. A good example is tree planting in the tropics. In theory, planting fast-growing trees in warm regions is a good way to take CO2 from the air and tie it up in the wood of the tree. So, you first use a carbon calculator to determine the amount of CO2 you emit in a certain activity, say driving to work or taking a trip by air. Then you pay a fee to a company that arranges for enough trees to be planted to absorb the same amount of CO2 that you have caused to be emitted by your car or plane trip. In theory, you have effectively canceled out the effect of your CO2 emissions.  However, tree planting has some serious potential problems with all three essential program elements. How do you verify that the trees actually being planted on a distant tropical farm? What kind of trees? How many? How much CO2 will each one absorb each year?  The requirement that offsets be "additional" is also a potential problem: how do you know that these trees won't be planted anyway, without your offset fee? Finally, "permanence" is also questionable. How can you be sure the trees won't be cut down, or die, before they can absorb a significant amount of carbon? Will they be replaced?It's easy to see that offset programs can easily run afoul of all three essential elements. Another good example of a questionable program is paying farmers to practice "conservation tillage," which is a set of farming practices designed to to build up organic matter by leaving crop residues in the field and incorporating them into the soil during the next growing cycle. The crops remove CO2 from the air, and then the resulting carbon compounds are stored in the soil. Part of the problem is that it's a good agricultural practice anyway, and can make crop production more efficient by minimizing soil erosion and increasing soil organic matter. Many farmers use it already to improve their productivity and bottom line. So it is often not really "additional." Also, it is difficult to verify exactly how much carbon is tied up in a given field. Finally, it is hard to make it permanent, since the farmer has to repeat the practice faithfully year after year in order to maintain the carbon in the soil. As a result of these problems, the more desirable carbon offset programs have tended to focus on discrete energy management programs that can more easily meet the three essential criteria. These programs can address either the supply side of the energy problem, or the demand side. On the supply side, offset money can fund solar and renewable energy projects, including methane (natural gas) capture from landfills or animal agriculture, windmills, solar panels, electric grid improvements, and so on. Alternatively, offsets can fund projects that reduce energy demand, like compact fluorescent light bulbs, more efficient appliances, or improved building insulation. These types of projects can be reasonably well structured to be verifiable, since they involve the purchase and installation of existing equipment that has defined performance characteristics, and can be monitored to insure proper operation.   Permanence is a little bit harder to achieve, since everything has to be maintained.  Therefore, it is important that attention be paid to long-term maintenance when setting up a program. One nice benefit of energy saving programs is that they are clear money savers, and so give the users of the improvement a powerful, tangible incentive to make the savings permanent.The essential feature of an offset program that gives the most trouble is the requirement that it be additional. A lot of private and public money is flowing into energy saving projects right now, and funding will increase substantially in the coming years. If you pay to offset your emissions from, say, a vacation airplane trip, you don't want that money to fund a project that already has a high rate of return, and will be funded anyway without your offset. See here for a good article on the dangers of using offset money to compensate for projects that will happen--or have happened--even without the offsets.  So what's the best way to insure additionality?Fortunately, it turns out that there are a range of energy-saving projects that are almost guaranteed to be additional: they all involve funding relatively simple and straightforward energy conservation projects that benefit low-income people. People who are living on the edge financially are least able to afford long-term investments that will save them dollars every day, and yet opportunities for such investments are readily available. The leading contenders are projects like compact fluorescent bulbs, weatherization, and insulation. Other ideas include the buy-back of inefficient appliances, getting low-mileage cars off the road, and the installation of solar panels or energy-saving equipment. 

Projects like these can be implemented directly in private homes, or they can be aimed at institutions that serve low-income neighborhoods, such as schools and churches. The have the collateral benefit that they create local employment opportunities and keep at least a portion of the money spent circulating in the local economy. There are lots of other project ideas out there, limited only by the imagination of suppliers. Of course, it is also important that these projects are structured to meet the criteria of verifiability and permanence. Overall, they provide the best mix of features to insure real reductions in CO2 emissions.Let's conclude by considering the ethics of carbon dioxide reduction. Unfortunately, as with life in general, there is no "free lunch" here. This means that we cannot expect to go on living our normal American way of life, burning large amounts of fossil fuels and  spewing out CO2 while we shop, travel, and dine, and then expect to redress the balance by buying the appropriate level of carbon offsets.  Although we anticipate that most CO2 reduction will eventually come from a renewable energy economy, a truly carbon-free energy system is decades away, at best. Meanwhile, individuals will have to make a combination of smart technological choices and deliberate lifestyle changes in order to bring about the required rapid reduction in CO2 emissions. We go back here to the problem we noted earlier in discussing the role of carbon offsets: the best science tells us that we cannot avoid dangerous levels of warming unless everybody dramatically reduces their emissions. There are a lot of different actions and strategies that we can pursue, varying in effectiveness and difficulty of execution.  Below is a list which suggests a number of possible approaches to CO2 reduction. We have to consider the facts, then make a deliberate choice about how we want to live.  By thoughtfully weighing these issues, and then deciding to act, we can live a life of awareness about our impact on the Earth, where we consciously choose our path, rather than one of blind acceptance of traditional or market-driven patterns of behavior. 1. First, make a commitment to become aware of the impact of your buying habits and lifestyle choices. Study, learn, and pay attention to what you do. Adopt a conscious strategy of emission reduction and living more lightly on the Earth.2. Support policies at the state and national level that will drive the conversion to a solar and renewable energy economy. This includes mileage standards for cars, wind, solar, better building codes, and improved energy efficiency throughout the economy. To combat global warming we need to convert as quickly as possible from a fossil fuel burning economy to an "electron economy," powered by the sun. This will take action at all levels, including national, state, and local governments, manufacturing and commerce, and individual households.3. Eliminate obvious energy waste wherever you can. Turn off the lights when you're not in the room, don't leave the hot water running when you're not using it, don't idle the car unnecessarily,, disconnect appliances and computers that may draw "phantom" power when you're not using them. (See here for a discussion.) If you think about it, you can probably come with a dozen little things that will help. These are simple measures that won't lower your standard of living--in fact, they put money money in your pocket at the cost of simply sharpening your awareness of all the little things that you do that waste energy. The impact of each individual action is small, but it adds up. 4. Spend money to save money. Buy more efficient cars and appliances. Increase the insulation in your house. Invest in fluorescent light bulbs. Actions like these will improve your bottom line, and eliminate a lot of CO2. (But be careful how you spend the savings: a few airplane trips can quickly wipe out all the benefits.)5. Make changes in your lifestyle and habits that will each help, in its own way, to save energy and reduce CO2 emissions.  Some examples: turn down the heat a little bit, don't buy as much of what you don't really need, and eat less meat.  (See here for surprising data on the contribution of animal husbandry to greenhouse gas emissions.) Buy the most fuel efficient car that meets your needs--and be realistic about what you really need. Think about the impact of your travel.  This takes a bit of work and commitment, but remember, you're helping to save the world from disastrous global warming. See here for a guide to better understanding your carbon impact and for a good list of ways to reduce your emissions by living a "low carbon lifestyle."

6. Buy carbon offsets to counterbalance the carbon emissions that you don't feel you can avoid. Give preference to offsets which invest in projects that follow the principles outlined above: energy efficiency and renewable energy projects that are local and benefit low income people.In sum, it is important that we don't try to use carbon offsets as a substitute for all the necessary actions that will be needed to reduce CO2 emissions. Rather, they should be thought of as a tool that can help to reduce emissions in the short run, while we work to make the long-run transition to a low-carbon worldwide energy system. Used in this way, carbon offsets can help keep us cool into the foreseeable future.

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