sustainable business

Carbon offsets: What are you really getting?

Thinkshift | March 13, 2013

Carbon offset purchases have become a popular vehicle for businesses that want to voluntarily reduce their carbon footprint and demonstrate their sustainability commitment. But not all projects that generate offsets are created equal. How can you verify that any given offset is what it seems to be?

First, some background: offsets—or emissions credits—are supposed to give purchasers assurance that a given amount of greenhouse gas (GHG) emissions will be avoided, reduced, or removed from the atmosphere to compensate for some or all emissions engendered, in the case of business activities, by anything from industrial production to employee commutes. A carbon offset may be generated in many ways. TerraPass, our offset provider, uses landfill gas capture, farm power, and wind power projects.

Because most offset purchasers are not qualified to judge the relative merits of offset projects, they rely on certifications to ensure that they are making an investment with a measurable positive impact. The Nature Conservancy and other organizations that either certify or offer offsets recommend that you look for the following criteria before making a purchase:

  • Permanence—basically, the life of the project. The most desirable projects go on indefinitely.
  • Additionality—proof that the amount of carbon dioxide avoided, reduced, or stored by the project would not have been avoided, reduced, or stored without the project.
  • Avoidance of leakage—emissions reduced within a project site that are simply displaced to another location. In the case of forestry projects, leakage can happen when carbon capture and storage at one site leads to land clearing elsewhere. Quality offsets do not result in leakage.
  • Measurement and monitoring—otherwise known as, “show me the data.”
  • Periodic third-party verification—to ensure that a project meets its intended goals and that all additionality, measurement, leakage, and permanence requirements are being fulfilled.

Feeling overwhelmed? Then just keep this in mind: real GHG emission reductions. Carbon offset projects should rely on tested and transparent methods for establishing an emissions baseline and calculating project-related GHG reductions. Also, offsets should be sold on the basis of documented reductions—that is, actual reductions, not promises of future action. The best way to ensure that’s the case is to make sure offsets have a respected, formal carbon standard certification.

Projects claiming to reduce or avoid GHG emissions and sell them in the marketplace can seek certification under any of more than 20 quality standards, some designed specifically for the voluntary (as opposed to the compliance) market. In the United States, three highly regarded voluntary carbon offset standards are the American Carbon Registry (ACR, both a standard and a registry), the Climate Action Reserve (CAR), and the Verified Carbon Standard (VCS). They determine whether the calculations and methods used by a project actually generate the claimed amount of offsets. Projects qualify for ACR, CAR, and VCS after being validated against the standards’ requirements by an accredited third party. Once validated and certified, offsets often are tracked in an independent registry like the CAR to ensure they aren’t double-sold or used beyond their valid lifetime.

How does our offset provider, TerraPass, get its street cred? By working directly with project developers to validate GHG reductions against the Voluntary Carbon Standard. TerraPass quantifies its VCS offsets using either the Kyoto Protocol’s Clean Development Mechanism or CAR landfill or livestock protocols.

The offsets you choose send a message about your enterprise’s own credibility on sustainability. So when it comes to reducing your carbon footprint with an offset purchase, it pays to do the research before opening your wallet.

Want to learn more about how offsets should be judged? Check out A Consumer’s Guide to Retail Carbon Offset Providers, a report by Clean Air-Cool Planet.


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