Public issues
Carbon offsets
Introduction
Is it worth paying extra to be "carbon neutral"? We investigate carbon offset schemes.
An increasing number of businesses are now selling carbon offsets for everything from your overseas holiday to your car use, your wedding or 50th birthday bash. Worldwide, the value of this voluntary offset market tripled last year.
But while your purchase might ease your conscience, is it really doing anything to address climate change?
What is carbon offsetting?
You like to think you do your bit for the environment - you recycle, walk or catch the bus to work and run an energy-efficient home. But that overseas flight you've booked is threatening to undo all your efforts. One return flight to the UK could cause the equivalent carbon dioxide emissions per person of driving from Cape Reinga to Invercargill 20 times.
For a few extra dollars, you could buy some "carbon offsets". The idea is that you can cancel out the emissions from your flight by paying to fund environmental projects - such as a wind farm or a tree-planting scheme.
Buyer beware
There's little regulation and no single defined standard for offset schemes. A recent UK review by The Carbon Rating Agency concluded the majority are likely to be delivering 30 percent less than they promise.
Worst-case scenario: you could be handing over money for nothing. Critics say there's little to stop a company claiming to be running a scheme that doesn't exist. Even if the scheme is legitimate, there are problems in calculating how much carbon is offset.
Take a tree-planting scheme. Trees take a long time to soak up emissions: the carbon from a flight taken today could take up to 100 years to be absorbed. Exactly how much carbon is taken up will depend on factors like tree species, soil and climate. And there's no guarantee the trees will survive - a fire could effectively wipe out any claimed offsets.
Offset projects also have to be in addition to "business as usual". They can't be projects that would have happened anyway.
Does it work?
Carbon offsetting has its critics. International watchdog group Carbon Trade Watch has panned offsetting for placing too much emphasis on individual lifestyles and distracting attention from the "collective political action that needs to be taken to tackle climate change".
Even those involved in the industry agree offsetting should be something you do after you've done as much as you can to reduce your carbon emissions. Melissa Munro, director of New Zealand company Offset the Rest, says offsetting is not a solution to climate change. But she believes it can contribute towards a solution by promoting the flow of funds to renewable-energy and energy-efficiency projects.
Carbon certification
There are about a dozen certification standards for voluntary offset projects. The two most well known are the Gold Standard and the Voluntary Carbon Standard (VCS).
The Gold Standard is regarded as the most demanding. Only renewable-energy and energy-efficiency projects can qualify for Gold Standard certification. Tree planting is ruled out because the scheme wants to promote a shift away from fossil fuels towards renewable-energy sources. Gold Standard certification has been awarded to an estimated nine percent of voluntary offset projects.
Less rigorous, the VCS offers certification for renewable-energy, energy-efficiency and forestry projects. Around 29 percent of voluntary offset projects have VCS certification.
Schemes compared
To check out the carbon market in New Zealand, we compared six schemes offering offsets for a return flight from Auckland to Brisbane. Three of these were offered by airlines and three offered by other organisations.
Guide to the table
Price is current at 18 August 2008 and includes GST.
- A price is for one tonne of offsets, the minimum quantity carboNZero sells.
What you buy shows type of offset purchased at August 2008
- B project allocated carbon credits from New Zealand Government's initial allocation of assigned-amount units under the Kyoto Protocol.
- C voluntary offsets verified by DNV Certification.
- D the Australian Government awards Greenhouse Friendly offsets to Australian renewable-energy, energy-efficiency and forestry projects.
- E afforestation offsets are from Landcare Research's native forest regeneration project, which is able to apply for Kyoto Protocol-compliant carbon credits under the New Zealand Government's Permanent Forest Sinks Initiative.
- F Gold Standard verified offsets are awarded only to renewable-energy and energy-efficiency projects (see "Carbon certification").
What we found
Emissions offset
There were big differences in the amount of carbon emissions that the schemes claimed to offset (see Schemes compared). Qantas calculated 331kg of emissions would be offset; Air New Zealand worked it out as 433.9kg; the carboNZero programme (run by Landcare Research) had a figure of 958.09kg.
One reason the carboNZero programme's estimate is more than twice the airlines' figures is because it uses a "multiplier" to take account of the higher global-warming potential of air travel. The airlines don't use a multiplier at all.
Programme manager Ann Smith says there's debate about the size of the multiplier that should be used. The Intergovernmental Panel on Climate Change recommends a multiplier of 2.7; but the carboNZero programme has opted for a multiplier of 1.9 (advocated by the UK Department for the Environment, Food and Rural Affairs).
Costs
We also found wide variation in prices. Qantas had the cheapest offset of the three airlines ($3.87), followed by Pacific Blue ($9.54) and then Air New Zealand ($14.80).
The most expensive was carbon.org.nz's offset ($156). This $156 price tag applies to any international travel - regardless of whether you fly from Auckland to Brisbane or from Auckland to Barcelona. And carbon.org.nz doesn't use an emissions calculator, so you don't know exactly what quantity of emissions you're offsetting. All the website tells you is that four trees will be planted on your behalf. That's not enough detail to make an informed choice before you buy.
Carbon.org.nz and two other schemes also include administration costs in the offset price (though information on how these costs are calculated is sketchy). This means not all of what you pay goes directly towards offset projects.
The airlines say no administration costs are charged. But Pacific Blue does include a "small" brokerage fee and also adds a 1.2 percent credit-card fee to your purchase (and this is on top of the $4 fee the airline charges when you book an international flight by credit card).
Projects funded
Five of the six schemes purchase offsets from projects that have been subject to some kind of independent assessment. These projects mostly involve renewable-energy or energy-efficiency initiatives (see Schemes compared).
The exception was carbon.org.nz, which uses revenue for tree planting on private land. Carbon.org.nz is registered to a web-design company. One of the company's directors is Olmec Sinclair whose family also owns the North Canterbury property where the trees are planted. He says over 600 trees (mostly oaks) have been planted so far.
What happens to the trees? There are no rules governing this kind of private offset venture. Carbon.org.nz's trees, for example, won't be there forever. The intention is to log the trees and use the wood for "community housing", though replanting is planned. Olmec Sinclair may be well-meaning, but there's no independent assessment of the scheme and it's very difficult to know just what you're getting for your money - if anything.
Landcare Research ecologist Larry Burrows is highly sceptical about the merits of this kind of scheme. He says the amount of carbon a small tree absorbs is tiny and it's not credible to sell credits from many years in the future for a flight made now. If the trees are harvested, then the scheme needs "to show how it will retain the offsets it has sold". You'd also have to factor in the carbon emissions from soil disturbance and the machinery used to log and mill the trees. Once these are included, Larry Burrows says, there may actually be a loss of carbon.
Our view
- Carbon offsetting doesn't reduce overall carbon emissions. At best, it keeps them at the same level: all you're doing is paying someone else to remove or prevent an amount of carbon that's roughly equivalent to what you've produced.
- If you're buying offsets, make sure your money is going towards a legitimate project. Ask whether it's been independently verified and by whom (see "Carbon certification"). Be aware that prices vary widely between providers and calculations of emissions offset may be rough estimates only.
- Making a donation to a worthwhile environmental project or to a public-interest group campaigning on climate change may be just as effective as buying offsets.
Those green claims
When the V8 Supercar race hit Hamilton streets this year, publicity claimed the cars were "racing green". Race organisers said more than 1000 trees would be planted to "balance" carbon emissions from the race. Sceptical? Carbon neutrality may be the latest must-have green credential but there's no legal definition of what it means.
Advertising claims do have to comply with the Fair Trading Act (which prohibits false or misleading statements). The Commerce Commission is currently looking into a complaint about a Meridian Energy ad which claims the company is carbon neutral.
Report by Jessica Wilson