Carbon offsets have always been a scam
A critical court case last week showed yet again how we have to tell the truth on climate action, even when it’s hard to take.
Last week a momentous win in the climate fight took place in the Federal Court of Australia.
One of Australia’s three electricity utilities agreed to settle a case brought by Parents for Climate against its misleading environmental sustainability claims. Energy Australia was forced to issue an apology admitting that carbon offsets are not effective and, crucially, do not render its fossil-fuel based electricity plans carbon neutral or green.
This win has affirmed what many in the climate movement have known for years: that carbon offsets are fundamentally flawed and are incompatible with serious plans for emissions reduction. The settlement sets an important precedent that exposes carbon offsets as the greenwash that they are, and forces a more honest reckoning about the true cost of climate pollution.
What is the problem with carbon offsetting?
A carbon offset is generated by a project that stores or avoids the release of carbon into the atmosphere. While companies claim that this cancels out or ‘offsets’ a company’s emissions, the carbon emitted by the original activity is still produced. Offsets can be created through a variety of projects that reduce, capture or eliminate emissions, including renewable energy and energy efficiency projects, agricultural projects, fuel switching, waste management, and land-based projects such as afforestation and reforestation.
In early 2022, as Greenpeace’s Head of Research and Investigations, I edited and published a report examining the issue of offsets and their use by corporations to disguise their emissions. As we noted at the time, carbon offsets are based on a series of false assumptions and assertions. Some key problems include:
Offsets, in particular international offsets, are difficult to regulate and monitor to ensure they are delivering on their claimed emissions reduction
It is not always clear that offsets deliver so-called ‘additionality’: often offsets are claimed for carbon reduction activities that would have taken place anyway.
Carbon offsets may not permanently offset the carbon emitted: if a forest is used as a unit of carbon offsetting, for example, and that forest later burns down in a bushfire, the offset carbon is released back into the atmosphere.
Carbon offsets regularly have unintended negative social and environmental impacts. This has particularly been the case for offsets in the Global South. A study of 12 REDD+ projects in the Brazilian Amazon, for example, found that they routinely overestimate their emissions reductions with very few actually achieving concrete carbon level drops at all.
Land carbon and fossil carbon cycles are different, and offsets from one to the other cannot be used interchangeably.
The arguably greater problem is the impact offsetting has on the mindset of people and corporations when it comes to emissions reduction and climate change. Offsets can lead the public to think that climate change is being adequately addressed, and corporations to believe they have a ‘right to pollute’ as long as the pollution is offset. Both serve to delay the energy transition and exacerbate the harms of a warming planet.
The seduction of carbon offsets
Despite these known problems, carbon offsets remain widely used. There are two main reasons why.
The first is that they are a relatively cheap and easy way for polluters to claim that they’re ‘doing their bit’ to help the environment and to pretend to be clean and green. Air travel is notoriously carbon intensive, but major airlines, like Qantas, all offer carbon offset schemes to their customers and claim they cancel out the emissions from flying. As was shown by Energy Australia’s admission, however, this is simply a form of greenwashing designed to shape public opinion as opposed to a genuine effort at emissions reduction. As a result of last week’s action, this justification has now very visibly been debunked and will likely take a back seat as a central claim by those who continue to use offsets.
The second is more complicated and more fundamental.
The Intergovernmental Panel on Climate Change (IPCC), the world’s leading body when it comes to the science of climate change, has for decades sounded the alarm about how slowly the world is dealing with the climate crisis. For each year that emissions continue to rise, the task ahead becomes exponentially more difficult. This is clearly demonstrated by the IPCC’s various modelled scenarios that show what we need to do to avoid the worst harms of climate change and remain under 1.5 or 2 degrees of heating.
However, what is rarely talked about, is that these scenarios all require offsetting or carbon removal of some kind to make the emissions numbers work, whether through the definitions used for ‘net zero’ (as opposed to absolute zero) or through the assumptions underlying direct carbon removal from the atmosphere. This is partly why major carbon offsetting schemes have attacked the Energy Australia decision, though a good deal of that dissent is also driven by anger that the scam at the core of the carbon offsetting business model has now been publicly exposed.
What happens now?
Achieving real, permanent change – whether on climate action or any other issue – starts with telling the truth.
That one of Australia's Big Three electricity utilities was forced to tell the truth about how their carbon offsetting products were little more than a form of PR or greenwash is a good thing for real action on climate change. It removes a fake solution that did active harm to the public’s understanding of the issue and motivation to act.
The challenge now is to harness that outrage and channel it into action that actually reduces greenhouse gas emissions, rather than just pretends to do so, while continuing to hold big polluters accountable for the harm they cause.
At Campaign Republic, we work with organisations who want to communicate honestly about the climate crisis and take action that matches the science. If you’re rethinking your climate strategy or communications in light of this ruling, we’d love to hear from you.
