About the term “climate neutral”

In this guest post Carbon Cloud writes about issues that can arise from offsets and how Direct Air Capture could be a better alternative.

This article was originally published on the CarbonCloud blog

Can a product be “climate neutral”?

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This is an interesting and complicated question. CarbonCloud holds the following position: If the life cycle of a product leads to a net release of greenhouse gases, the product should not be referred to as “climate neutral” even if the emissions are compensated for with carbon offsets.

What is carbon offsetting?

Some companies compensate their climate footprint by supporting projects around the world that either mitigate emissions of greenhouse gases compared to a baseline or remove greenhouse gases from the atmosphere. This is known as “carbon offsetting”. The intentions are praiseworthy, and it can definitely make sense to communicate about them to the public; however, not by claiming to be climate neutral. Instead we encourage statements of the type: “Our climate footprint is XX kg CO2e. We work on reducing our greenhouse gas emissions. We also invest in project YY that we believe can contribute in the fight against climate change.” This is the honest and transparent way. Why then, does the positive not just simply cancel out the negative? There are two main reasons.

1: It is very hard to know how large effect the projects really have. In many cases, they do not even seem to work at all.

2: There is a clear risk of double counting, meaning that several parties take credit for the same emission reductions, or greenhouse gas removals. Let us take a deeper look at these issues.

Does carbon offsetting work?

This is the million-dollar question. In some cases, it is inherently hard to asses. In other cases, we know that the answer is no. For each project we need to ask ourselves the following:

  • Does the project deliver the intended results? Things do not always go as planned. A large project in Kenya invested in energy efficient stoves. As it turned out, most of them were never used. Yet, climate offsets were certified and sold. In other projects we will not know the outcome for a very long time. Planted trees, for instance, only absorb and store carbon as long as they are not cut down. How can this be guaranteed for hundreds of years in countries such as Uganda, ranked as one of the most corrupt countries in the world?
  • Is the project “additional”? In some cases, the project would have taken place anyway, even without the income from carbon offsets. Wind power farms, for instance, produce carbon offsets based on the assumption that the electricity produced replaces coal power. But many of the countries that host the carbon offsetting projects are growing economies with a steadily increasing energy demand. The wind power farms may very well have been built anyway. Additionality is generally an explicit requirement for carbon offsetting project. But unfortunately, the analysis of whether a project is additional is often highly subjective and hard to evaluate in a transparent way. A German research study (Cames, 2016) found that only 2% of the investigated projects had a high probability of being additional.
  • Is leakage avoided? Leakage is when greenhouse gas emissions increase somewhere else, as a consequence of the carbon offsetting project. If trees are planted on land used by the local population for forage or agriculture, this may lead to other trees being cut down elsewhere. The local farmers may have no other options than to clear vegetation at a new location in order to continue their agricultural activities. This becomes at best a zero-sum game for the climate but a loss for the farmers who need to move, and a loss for biodiversity since planted forests host less biodiversity than natural vegetation.

Who takes the credit?

This is the second question we need to ask. In the business of carbon offsetting, it is not unusual that more than one party takes credit for the same action, resulting in deceptive book-keeping. Let us use an example: trees are planted in Uganda in a carbon-offsetting project. Company X buys the carbon offsets and label their products as “climate neutral”. This means that company X takes credit for the removal of greenhouse gases. However, it is not unlikely that Uganda also accounts for tree planting in the national inventories of greenhouse gas emissions. In that case the action is double counted.

Let us take another example. A wind-power plant is built in Brazil. Carbon offsets are sold, based on the assumption that the electricity replaces coal power. Avoiding double counting means that Brazil will have to assume that the electricity produced comes from coal power, although it actually comes from wind. This does not lie in the interest of Brazil, who has targets to reach under the Paris agreement. If enough carbon offsetting credits are sold, Brazil could end up in a situation where they have only renewable energy in reality but would need to keep on reporting as if they had only coal power, since they have sold the right for the emission reductions to other parties.

The negotiations of the Paris agreement have shown us how difficult it is to agree on rules that avoid double counting. Reaching our climate targets requires that we BOTH reduce emissions in all countries around the world AND remove greenhouse gases from the atmosphere, for instance by planting trees. Double counting blurs our vision and makes it harder to keep track of what remains to be done. If we look specifically at the food industry, we see that it is currently responsible for about 25% of global greenhouse gas emissions (IPCC, 2014). To fulfill the Paris agreement and stop climate change these emissions will have to be reduced, even if all other emissions are reduced to zero! Crediting the food industry with reductions in other sectors can hence not be the solution for the food industry and such claims have the risk of delaying real and effective measures from being made.

What do we suggest?

There are technologies that you could argue actually work. One example is direct air capture, involving facilities that capture carbon dioxide from the air so that it can be stored below ground. It is a technology that has a high probability of giving the intended results. The likelihood is very low that that the carbon dioxide will escape from its storage below ground. It is a costly technology with no other positive side effects. Therefore, it can be considered “additional” since it will not be implemented unless someone pays for it. There are other technologies for climate compensation that you could argue also work. We applaud any engagement in such projects. However, our basic appeal is this: find out your climate footprint and communicate it to your customers without smokescreen. CarbonCloud is here to help!  

Cames, M., Harthan, R. O., Füssler, J., Lazarus, M., Lee, C., Erickson, P., & Spalding-Fecher, R. (2016). How additional is the clean development mechanism. Analysis of application of current tools and proposed alternatives. Oeko-Institut EV CLlMA. B3.

IPCC. (2014). Mitigation of climate change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change1454.