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Carbon Offsets Should Make You a Little Nervous

Greenhouse gas “offsets” — where you pay others to reduce their pollution today, or bet on schemes to remove yours tomorrow — are all the rage, but they come with risks. We need offsets, but they must be used wisely, sparingly, and without distracting us from the job of reducing our emissions.

The most important action to stop climate change is simple: Reduce the damn emissions of greenhouse gases that cause it.

But it seems that some people don’t want to talk about that. Instead, we hear a lot about reaching “net-zero” emissions (instead of zero), using emissions-trading markets, or even fanciful ideas of “carbon removal”. And we’re hearing a lot more of this from tech investors, business executives, and government leaders lately.

This talk makes me a little nervous, and it should bother you too. Much of it shows a deep misunderstanding of the climate problem, and what we have to do to solve it.

Yes, some limited carbon offsets can be useful. Done well, they can help create financial incentives for avoiding and reducing low-hanging emissions around the world today. They can also financially support nature conservation projects that avoid deforestation and protect biodiversity. And, in the long term, carbon removal projects may help us offset emissions from some hard-to-decarbonize products like steel, cement, plastic, and jet fuel.

Done poorly, however, carbon offsets can be a giant distraction, causing even more delays to meaningful climate action, diverting us from the essential work of bringing emissions to zero.

Worst of all, they can be used by polluting industries to make it appear they are working on climate change, without actually reducing their emissions at all. And that’s a distraction we cannot afford. In particular, the notion that fossil fuel companies or big agricultural emitters can use offsets to reach “net zero” is absurd. It’s the ultimate climate fig leaf, and is a form of “predatory delay” — or an attempt to keep stalling meaningful climate action a few more years, while still raking in giant profits. And big polluters have mastered the art of predatory delay. Be on the lookout for it.

Burning fossil fuels for electricity, transportation, heating, or industry is so vast it simply cannot be “offset” (Figure 1). Nor can the giant agricultural emissions from deforestation, livestock, or heavy fertilizer use (Figure 1). These emissions must be phased out, as quickly as possible, with replacements we have on hand today. Offsets won’t cut it.

Figure 1. Breakdown of global greenhouse gas emissions, by major sector and key emitting activities. Emissions data are taken from each chapter of the IPCC Fifth Assessment Report, Working Group Three. Data analysis and graphic by Jonathan Foley © 2021.

For some limited emissions sectors, where alternatives do not yet exist, offsets might make sense. For example, offsets for cement, steel, aviation fuel, and other materials that currently don’t have zero-carbon replacements — and are much smaller fraction of the global emissions budget — might be appropriate. At least for a while, until low-carbon replacements are found. But even then, it is still fraught with the potential for predatory delay.

So, let’s consider using carbon offsets, wisely and sparingly, but only when primary emissions cannot be reduced. And only after we truly understand the limitations of different offset schemes.

What about the carbon offset projects themselves? Are they reliable? Do they work as promised?

Not always.

Traditionally, most carbon offsets focused on avoiding or reducing emissions elsewhere — basically paying other polluters to avoid or reduce their emissions (compared to an established baseline level) and then give you “credit” for it. There are lots of complicated policy and market mechanisms at work, but the idea is simple: Instead of reducing your emissions, you give someone else money to do it instead.

While this can sound like a carbon shell game, and often it is, it can be helpful in some ways. Maybe someone else can reduce emissions more quickly, at a lower cost, than you can — but they lack the money to do so. Projects that limit deforestation and protect biodiversity are my favorite. Or maybe someone else can avoid growing their emissions, compared to what was expected, thanks to your funding. Or perhaps you simply can’t lower your emissions easily — from manufacturing steel or cement, growing beef or dairy, or owning an airline — and these offsets are the only way to reach a “net-zero” climate goal.

More recently, the notion of carbon offsets has grown to include efforts that try to remove greenhouse gases (usually carbon dioxide, but other gases could theoretically be included) from the atmosphere, after they have been emitted.

It’s important to remember that nature, primarily in forests and the ocean, already removes ~41% of our greenhouse gases each year, for free (Figure 2). That’s a staggering amount, and we should be grateful for it. Without these natural carbon “sinks”, climate change would be a lot worse than it is today. And that’s why it is so crucial that we protect nature and its carbon sinks, especially in forests and the ocean.

Figure 2. The greenhouse gas budget of the atmosphere. On the left, humans emit greenhouse gases from six key sectors — electricity, food agriculture & land use, industry, transportation, buildings, and other activities. On the right, nature removes ~41% of our emissions (or ~55% of the CO2 we emit) in forests and the oceans, leaving ~59% of the emissions in the atmosphere, contributing to increased climate change. Emissions data are from the IPCC Fifth Assessment Report, Working Group Three. Sinks data on carbon dioxide from the Global Carbon Project (adjusted here for whole greenhouse gas mixes). Graphic by Project Drawdown © 2021.

Beyond this, many believe that it is possible to add new, human-generated carbon sinks, either by working with natural processes or new technologies. There are numerous schemes afoot to try this. Whether by managing farmland or coastal ecosystems differently, accelerating geological weathering processes, or deploying industrial carbon removal technology at massive scale, these efforts aim to make a dent in the atmosphere too. But we haven’t so far. In fact, our attempts to remove greenhouse gases are not yet even visible to the global atmosphere. Our efforts at carbon removal haven’t budged the climate system at all, and it’s going to be a long time before they will.

But we should try.

To start, I think we should focus on natural processes on land and in the ocean — mimicking what nature does already — so that they absorb even more carbon dioxide. Planting forests, restoring carbon-rich soils on agricultural and degraded lands, restoring coastal ecosystems, and planting kelp forests, are ways to do this right now. And there are others.

There is a lot of excitement around nature-based carbon removal. Proposals to plant billions of trees worldwide, or deploy “regenerative agriculture” across vast areas, are getting a lot of attention. While there are concerns about how large, how effective, and how permanent such solutions might be, they are attractive. By mimicking nature, we have a proven model to follow. Plus, done wisely, they could offer co-benefits to water, habitat, and biodiversity. It may also be possible to build new technology-based carbon sinks, using a variety of industrial and chemical processes. These systems have been referred to as carbon capture & storage (when linked to a power plant), direct air capture (in the free atmosphere), or generally as “negative emissions technologies”.

So far, machines that remove greenhouse gases at any meaningful scale are just a dream, and you’d be wise to be skeptical. Maybe someday they’ll show up at scale, but I’d rather help nature do the job. Nonetheless, we should keep an open mind about these technologies — as long as they don’t become another distraction or yet one more excuse to “kick the can” down the road.

The family of carbon offsets includes market-based approaches for emissions avoidance & reduction trading with nature-based and technology-based carbon removal. These tactics are quite different, but they share underlying concerns that must be addressed. In particular, we need to carefully assess the physical limitations of any proposed offset:

  • Size. How big is the proposed offset, and how do we know? Estimating the size of emissions avoidance & reduction is one issue, often affected by assumptions about baselines. And carbon removal proposals are plagued by controversial claims about the size of potential sinks, especially in regenerative agriculture and tree planting.

  • Time Lags. Are the offsets immediate, or will they take decades to offset today’s emissions? Avoiding or reducing emissions today has an immediate impact, no matter where they happen. But carbon removal schemes (especially those betting on trees & soil) can introduce substantial time lags — so they cannot effectively offset today’s emissions. Instead, emissions will cause warming for years, even as they are slowly offset by trees and soils that take decades to build up.

  • Permanence. Are offsets only temporary? How can we be sure they won’t return their carbon to the atmosphere in the near future? Carbon removal projects, particularly those in trees & soil, may not be permanent — especially as landscapes are increasingly disturbed by humans and climate change. Unless they are actively managed for centuries, trees & soil may not be a reliable place to store carbon. Geological carbon reservoirs, on the other hand, are more likely to be stable for long periods of time.

There are also many policy and economic concerns about offsets:

  • Verifiable. Some promised carbon offsets have proven difficult to verify and stand up to the rigor of an outside audit. How do we increase the veracity, transparency, and reliability of carbon offsets?

  • Additional. Are the carbon offsets truly “additional” emissions reductions or carbon removals, or would they have happened anyway?

  • Leakage. Do carbon offsets, especially those aiming to avoid or reduce emissions, accidentally cause “leakage” in other parts of the economy, causing an unintended rise in emissions elsewhere?

And there are other issues to consider:

  • Equity & Justice. Are offsets perpetuating longstanding challenges of climate equity and justice, or making them worse? Might offsets allow some industries to keep polluting — often causing incredible harm to poor people and people of color?

  • Other Impacts. Are there other, unintended impacts to nature or society from carbon offset projects? If so, who is responsible for them?

Inshort, carbon offsets can be risky. And they are not a substitute for reducing emissions or protecting nature’s existing sinks. Yes, they can help finance some low-hanging emissions reductions today. And some carbon removal may be needed as we tackle the most hard-to-decarbonize emissions in the future. But are not a replacement for more effective and urgent action on reducing emissions.

I often get asked, “What are the best kinds of carbon offsets for a company, community, or nation to pursue?” Based on the issues presented above, I would rank them from 1 (the best) to 4 (the worst).

1. None. The best offset is the one you do not need. Reduce your own emissions instead. There is absolutely no substitute for this, especially in the big energy and agriculture sectors. Stop thinking “net-zero” and focus on “zero” — or as close as you can get. 2. Offsets that reduce or avoid other emissions today. We need immediate reductions in emissions, whether they are yours or those of people you pay in the offsets market. So the next best offsets are those that avoid or reduce emissions today. But they need to be offsets that can be verified, are additional (not happening already), and permanent. Preventing deforestation and protecting biodiversity in sensitive ecosystems can be a very good offset prospect. Eliminating refrigerant emissions from landfills is another excellent offset choice. Or eliminating methane leaks from industry, landfills, and agriculture. Or funding energy efficiency projects in communities that lack the capital to do this today. 3. Offsets that use natural carbon removal in soils, trees, or coastal ecosystems, and don’t compete with food supplies or biodiversity. But be careful here — these carbon sinks may not be permanent or verifiable. Also, an important issue with nature-based carbon removal: While waiting for nature to offset your emissions, as trees grow and soils build-up, those emissions will still cause decades of warming. 4. Those that depend on carbon removal technologies that don’t exist at any meaningful scale yet. In a couple of decades, technology-based carbon capture at scale may be feasible and needed to clean up our hardest-to-decarbonize sectors. But I’d focus much more on 1–3 in the meantime. It is way too risky to rely on this as a primary tool today. We’re still in the early research stages of this technology.

With apologies to Michael Pollan and his Food Rules, I think it’s helpful to wrap up this essay by offering up some “Offset Rules”.

The best offset is no offset at all. Instead, reduce emissions — especially in the big energy and agriculture sectors.

If you truly can’t lower emissions, because there are no ready alternatives, offsets should be used sparingly.

Offsets that avoid or reduce emissions today are best, followed by those that use nature to remove carbon later.

Offsets that rely on nascent carbon removal technology are the riskiest of all. They may be useful someday. But not today.


Dr. Jonathan Foley (@GlobalEcoGuy) is a climate & environmental scientist, writer, and speaker. He is also the Executive Director of Project Drawdown, the world’s leading resource for climate solutions.

These views are his own.

Copyright © 2015–2021, Jonathan Foley. All rights reserved.

Note: Some passages in this essay were adapted from “We Need to See the Whole Board to Stop Climate Change”.

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