Navigating a complex space
The underlying principle of carbon offsets is relatively straight forward: an organisation can choose to reduce its carbon emissions internally or can purchase someone else’s carbon reduction or “carbon credit.” In simple terms, it is a form of outsourcing.
This outsourcing is enabled by the universal measure of greenhouse gas emissions in carbon dioxide equivalence (CO2-e), which in conjunction with government imposed or voluntary standards, create a national and international tradeable commodity.
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But here is the rub: outsourcing of carbon reductions shifts attention from an organisation’s obligation to decarbonise its activities while commoditisation can conceal the associated environmental, social and economic risks (and potential co-benefits) from the production of the carbon offsets.
According to the Grattan Institute:
Offsetting is a difficult part of the net-zero conversation. Some see it as an excuse to delay reductions, others as bringing about unacceptable social change, particularly in rural areas. It has been plagued by integrity problems, and there is understandable cynicism about its potential.
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None of this changes the reality: in pursuit of net zero, offsetting will be required because there will be emissions we cannot eliminate, and some where we will not be willing to pay the price to do so. The only option to deal with these emissions is to deliberately remove carbon dioxide from the atmosphere to offset them.