🔎 What’s going on?
Last week, academics at the University of Oxford launched ‘The Oxford Principles for Net Zero Aligned Carbon Offsetting’ (or the Oxford Offsetting Principles). Carbon offsetting has been getting a bad rep for a few years now and this new standard aims to restore credibility to offsetting as a market mechanism.
🌳 What does this mean?
As the global COVID-19 pandemic has played out this year, a raft of carbon commitments has been announced by governments and businesses. However, carbon offsetting has its fair share of controversies, which we will explore later. Let’s first understand what carbon offsetting is and what the four principles mean.
According to the UNEP, an offset scheme promises to cancel out the emissions in one place with emissions-reducing actions in another. It’s a market mechanism that helps polluters pay other actors for carbon reduction or removal (i.e. credits). Carbon offsets are not all the same - to the trained eye, they can vary immensely.
The Oxford Offsetting Principles are as follows:
Principle 1 - Cut emissions, use high quality offsets, and regularly revise offsetting strategy as best practice evolves
Prioritise reducing your own emissions (i.e. Scopes 1, 2 and 3), rather than opting for offsets in the first place. Use verifiable carbon offsets (such as Gold Standard credits) for unavoidable emissions. Be transparent about your current emissions, offset credits and net-zero ambitions.
Principle 2 - Shift to carbon removal offsetting
Most carbon offsets in the market are about short term carbon reductions, however, businesses should instead increase the portion of carbon removal offsets (i.e. removing carbon from the atmosphere permanently).
Principle 3 - Shift to long-lived storage
Related to principle 2, all the carbon removed should be stored (in soil, trees or rocks) more permanently and for longer periods of time. Think hundreds or thousands of years, rather than a couple of decades.
Principle 4 - Support the development of net zero aligned offsetting
By following principles 2 and 3, create demand for a net zero aligned carbon offsetting (i.e. long term carbon removal and storage) rather than just carbon offsetting (i.e. it’s all about carbon reduction).
❓ Why should I care?
The United Nations Environment Programme (UNEP) said it best when they published an article last year titled ‘Carbon offsets are not our get-out-of-jail card’ as a response to the controversy surrounding carbon offsetting. The main concern came from polluters buying carbon offsets to continue polluting, rather than reducing their actual carbon emissions. There is also a degree of greenwashing by businesses, especially when carbon offsets and/or carbon accounting practices are not publicly transparent and cannot be verified.
🚦 Where do we need to be?
We need to create a market for net zero aligned carbon offsetting. Carbon offsets are a market mechanism, meaning there has to be demand for credits and supply of credits. Without supply and demand, they are worthless. The more trust or credibility carbon credits have in the market (i.e. they do what they are designed to do), the higher the demand from the market. And the supply of high quality carbon credits then naturally follows. The goal is for markets to reach an equilibrium price by themselves, where supply equals demand. When more and more businesses adopt these principles, a new standard and market are born.
👤 What can I do about it?
If you are a business, then adopt the Oxford Offsetting Principles into your net zero strategies. And buy high quality carbon offsets for unavoidable carbon emissions from the likes of Gold Standard or Verra.
If you are a working professional, then educate yourself on carbon removal projects/technologies and encourage your workplace to go beyond carbon neutral. Check out Nori which is a carbon removal marketplace working with businesses to help them remove carbon.
Related: Stripe makes first carbon negative purchases