One of the jewels in Australia’s carbon offset crown are savanna burning projects. Image from Aboriginal Carbon Foundation

Ask those in the know whether carbon offsets are reducing global emissions and benefiting the planet, or simply companies paying to greenwash their bad behaviour, and the answer will most likely be — “yes”. 

The shades of grey surrounding carbon offsets largely come down to two things. Whether companies are genuinely using them as a last resort after first reducing their physical emissions as much as possible, and secondly, the quality of the offsets they choose to go with. 

There are many different types of carbon offsets to choose, from tree planting to better cattle management, which at their best preserve key habitats and reduce atmospheric carbon. 

At their worst, as Westpac recently found out, they can also be linked to harmful social and environmental outcomes and cause major embarrassment for companies who are either looking for a cheaper credit or failing to properly explore what they are purchasing. 

Carbon offsets. What are they good for? 

We generally think of carbon offsets being first and foremost about companies reducing their carbon footprint to zero. While this is at least on paper a respectable goal, there is an understandable level of scepticism and frustration that also exists with offsets often being thought of as “a get out of jail free card” or a “distraction”. 

 But what if the real benefits of offsets were in the co-benefits? 

If we can get major corporations paying for revegetation initiatives that create more biodiversity, better local air and water quality, repopulate fish stocks and protect species from extinction, not to mention the myriad social and economic benefits, shouldn’t we be celebrating and expanding such initiatives? 

Sustainability advisor with Partners in Performance and founder of Plico Energy, Brian Innes says he is certainly in two minds when it comes to offsets. 

“I’ve got lots of people who I know are doing wonderful things for the right reason, creating offsets that [otherwise] wouldn’t happen. So I’d hate for the offset concept to disappear because people didn’t understand that it is grey,” Innes says. 

“But we need to make sure that our corporates are…looking at it more than just trying to get to a claim of net zero, and are doing the offsets for the altruistic reason of making Australia a better environment.”

Are companies like Westpac to blame when things go wrong? 

Senior director at ENGIE Impact and consultant with Climate Active, Josh Martin explains, “it’s always going to be on the end user of those offsets to do their due diligence over the projects for which those offsets were created.”

Checking into the validity of offsets is not as simple as you might think. Part of the problem is that there are multiple frameworks upon which they can be created and verified.

In Australia, companies can choose to voluntarily become certified carbon neutral, by government run organisation, Climate Active, and you may think this comes with a fair amount of questioning and auditing of credits. 

However, Martin says with a view to reduce barriers for companies to participate, Climate Active has created “fractures” within the program. 

“They’ve kind of removed a number of what I would say were key aspects of the scheme that really upheld the rigour of the process,” he said. 

“For example they reduced the audit requirement to once every three years. Some organisations if they’re small enough don’t have to have audits at all.”

According to Martin, auditors are also no longer required to actually check the offsets; a process that he says in the past frequently revealed companies funding less than ideal projects, such as overseas large-scale renewable energy generation projects that add little additional value and are economically feasible enough to exist without the additional funding.

One of the things companies can do is purchase a suite of offsets including what Martin calls “hero offsets”. While these may be more expensive, they come with a good story and the associated marketing and feel good opportunities, while the majority of their offsets are actually low quality. 

Earlier this month, carbon market analysts RepuTex reported that 90 per cent of all the offsets bought by Australian firms were going to overseas projects, a fact they attributed to a rising price for locally produced credits.

Which offsets are best? 

Generally considered among the best offsets are those that restore habitats, are genuinely additional meaning they wouldn’t exist without the funding from the offset, and that have a positive social impact. 

Australian Carbon Credit Units (ACCU) are widely considered to be of a decent standard, however, even these need to be considered in the broader context. 

“Offsets really need to be looked at as a national tool, not really a corporate tool,” Innes said. 

“For example if we develop an offset for not cutting down trees…but the state government allows a whole bunch of trees next to it to be cut down it actually doesn’t do anything.”

Savanna Burning

One of the jewels in Australia’s carbon offset crown are savanna burning projects, largely undertaken in Australia’s north and involving traditional burning techniques by indigenous communities to reduce the intensity of future fires. 

A 2018 study published in the science journal Nature said methane and nitrous oxide emissions from fires contributed to around six per cent of global emissions in 2014.

It found that the world leading, 24,000 square kilometre Western Arnhem Land Fire Abatement project (WALFA), achieved a mean annual emissions reduction of 37.7 per cent (116,968tCO2-e), relative to baseline emissions over its first seven years of operation.

These results have since been scaled up in Australia as well as replicated overseas.

In isolation from the goal of changing companies’ behaviour, major corporations funding remote Indigenous communities to carry out land care through traditional practices would likely be seen as an incontrovertible good. 

However, in the context of how effective these projects are at reducing global atmospheric carbon and changing companies’ behaviour, should they too be considered a distraction?

Once the challenges of reducing emissions are being met, which is a crucial step before companies even consider offsets, Innes says it makes sense to start looking at actually making the planet better and restoring our terrestrial environment. 

“There is a bit of dirty water in offsets, but there’s a lot of really good things that it can also do. It would be a shame to throw the baby out with the bathwater,” Innes said. 

“If corporations are going to go and spend money on these things where the co-benefits are great, that’s what we’d like the system to do. But you need a lot of transparency to look through that.”  

In Australia, we have ample opportunities to be carrying out carbon offset projects that deliver lifechanging co-benefits as well as cleaning up our environment, but the decision to do so is entirely at the behest of companies who can just as easily and more cheaply be paying for a wind farm in China that was going to be built anyway. 

Martin says currently there is little to no institutional guidance over how to improve the quality of offsets. 

“There’s a lot of thought and strategy that needs to go behind offsets. I don’t necessarily think that Climate Active encourages that sort of thinking,” Martin said.

“It’s largely left up to the organisation to make those decisions.” 

And it’s largely up to us to ensure they make the right ones.

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  1. As the leading provider for Climate Active (having helped about half the participants)I felt it prudent to correct a few errors here.
    1. ““For example the reduced the audit requirement to once every three years. Some organisations if they’re small enough don’t have to have audits at all.” – The audit is now only required on the base year but Climate Active is currently auditing 10% of the participants each year at their cost. In addition small orgs (under 1,000 tonnes) still need a 3rd Party Validation. So everyone gets a minimum of one audit/validation.
    2. “auditors are also no longer required to actually check the offsets” This is because Climate Active now audits the offsets as they typically are more across the offset market to ensure the integrity of the scheme.

  2. Sorry, no, ALL offsets are a completely delusional con. All they do is allow a polluter to buy the right to pretend they are not polluting. The seller of the carbon offset then “owns” the pollution – yet nothing has changed, no pollution has been reduced. The most dangerous thing about offsets is the way they let everyone off the hook and into believing that something has improved and into complacency. The scary thing is how dependent our policymakers at all levels of government and internationally and our corporations are on carbon offsets rather than the super URGENT real change that we NEED NOW!