The Oxford Offsetting Principles, first published in 2020, have become “flagship guidance on credible and net zero aligned carbon offsetting … used by hundreds of organisations since its first publication”, according to Mette Morsing, director of the Smith School of Enterprise and the Environment.
She made the remark during her opening of a panel debate on the occasion of the publication of the revised edition after two years of internal debate at Oxford Martin School. The principles set out the case for offsetting as a means for reaching global net zero. They posit that offsetting with credits derived from carbon removals with high durability needs to increasingly replace offsetting with emission reduction and temporary storage carbon credits.
While it is true that residual emissions will need to be matched with permanent removals eventually, we are far away from that time.
Even to promote this concept now risks distracting us from the key issue at hand: the need to urgently reduce emissions. To enhance this focus, governments and the private sector must set separate targets for removals and reductions rather than combine them.
This is more nuanced than a blunt “offset with removals” approach, as removal targets will initially not be required to match the volume of unabated emissions, and will eventually exceed it in order to reach what some might call “negative emissions” territory. Ultimately, the focus for the next decade (at least) should be on how to reach reduction targets and not on how to set removal targets.
Setting off on a new path
Carbon markets cannot just be reformed so as to be more credible tools for offsetting strategies. Offsetting can’t be fixed either by limiting it to permanent, engineered removals. Carbon markets must remain focused for now on financing rapid decarbonisation in places that need external financial support. To that end, massive improvements in tracking financial flows must also be achieved. It’s not enough to publish bold market volume estimates, we also need to know where all this money is actually flowing.
In a letter, we and civil society allies, including Oxford Net Zero, urge leading voluntary climate action standards, like the Science Based Targets initiative, not to bow to pressure to allow companies to meet scope 3 targets with carbon credits.
Paying for external climate contributions, or engaging in “beyond value chain mitigation” as is now advised by SBTi, is much more honest and effective than offsetting. Carbon markets then can be a tool for buyers to support the effort to reduce humanity’s climate footprint without misleadingly claiming that it will lead them to corporate net zero.
Carbon markets have legitimate potential to evolve and grow in financial flows to developing countries by beyond value chain mitigation becoming more widespread. At the same time, we need to keep thinking critically about the realistic contributions that these systems can be expected to deliver and be cautious about announcements of growth projects which might be self-serving business predictions. Moreover, carbon markets are not intrinsically a better way of channelling climate finance to the Global South than impact funds or government grants. They should neither replace climate finance nor development aid.
While advocating for offsetting with carbon removals is a valiant attempt to correct a market dominated by very short-term storage and low-quality emission reduction credits, it is a solution beset with its own problems: It assumes that the voluntary carbon market could play an instrumental role in incentivising and funding large-scale removals when this will need dedicated policy tools involving government finance and above all the right governance rules in place. It is problematic to continue to advise “offsetting” because it stands in the way of a major course correction on current practice with a view to financing the best mitigation options. We need science to guide policies and markets but also to sidestep the pitfalls ahead.
source: carbonmarketwatch.org (Sabine Frank)