Why I never buy carbon offset.

Sustainability

Nov 4

Before you start reading, here's the content summarized in two sentences:

It is well documented that it doesn't work, and in many cases, it leads to more emissions. Trying to buy oneself out of the problem also diverts focus from what really matters: actually cutting emissions.
Here’s a fresh article on the EU ban on offsetting btw

For those who have time and want to delve into this, here is a long article:

Not long ago, I read an opinion piece on NRK's website (NRK is like BBC of Norway). A Norwegian tourist wanted to tell us that long flights were good for the environment. This person, had visited every country in the world, and claimed that "climate hysteria has gotten out of hand" and that his holiday travels were saving the world. He also pointed out that emissions from war were worse than his travels. It's hard to argue against the latter. I doubt many were provoked by the text, even though a researcher from NTNU took the trouble the next day to provide some factual information in a response, which was only appropriate.

Enough about that. My point in bringing up the Norwegian holiday enthusiast is that his text made me think about this need we humans have to defend what we do. The need for a clearer conscience. Looking for easy solutions is a part of human nature, and if we can avoid changing our behavior, that's absolutely most attractive. Paying our way out of trouble is by no means a new phenomenon. Humans have been buying a clear conscience for a thousand years. The church has been operating with indulgences since the early Middle Ages.

Indulgence, or indulgentia, comes from the Catholic Church and has historically been associated with the removal or reduction of punishment for sins. In the Middle Ages, indulgences were seen as a way to cleanse the soul of sins, both in this life and in purgatory after death. There was a belief that by performing certain actions, such as giving money to the church, going on pilgrimages, or doing good deeds, a person could receive an indulgence, which in practice reduced the punishment for sin.

During the Middle Ages, the trade in indulgences developed into a controversial system where the church often sold indulgences as a way to finance large projects, such as the construction of churches (for example, St. Peter's Basilica in Rome). This system was heavily criticized for corruption and abuse, and it was one of the main reasons for the Reformation in the 16th century led by Martin Luther.

Carbon credits, or climate indulgences, are in many ways like the indulgences in the church. It might work against a guilty conscience, some make a lot of money, but otherwise, it has little or no effect, and the system has been strongly criticized.

This text probably won't be nailed to a door in Wittenberg in the form of 95 theses, but it still contains quite a few good arguments for, and mostly against, this modern trade in indulgences, so if you want to nerd out in the area, you have a good opportunity here.

In a Hallowed Conference Room of Kyoto, the Birth of Climate Compensation is Proclaimed

Let's begin our story a little further back in time, more specific in December 1997. Representatives from the UN member countries gathered in Kyoto, Japan, to sign an important climate agreement. This agreement, known as the Kyoto Protocol, served as an addition to the UN Climate Convention (UNFCCC), which had been adopted in Rio De Janeiro a few years earlier, and was the first agreement under the convention that set legally binding emission reduction targets for industrialized countries.

As usual, there were many and hard disagreements in the discussions and during the negotiations, it became clear that new and more flexible approaches were needed to handle climate challenges. The USA, in particular, strongly argued that solutions that were both flexible and cost-effective were needed. This was a problem that largely lay with industrialized countries since the agreement only included them. These countries faced demands to reduce their emissions, but they all agreed that the measures risked being too costly to implement. The rich countries voiced concerns regarding the cost, emphasizing that the price must remain reasonable for the project to be viable.

Therefore, the solution that gained the most support was the idea that rich countries should instead outsource their emission-related measures to developing countries, where it was much cheaper to run climate projects. This allowed the wealthy nations to meet their emission targets without having to undergo major transformations in their own operations. At the same time, developing countries would gain access to green technology, which they often lacked the means to acquire themselves.

This had to be a win-win situation: rich countries could achieve their goals, they didn’t even have to change, while poor countries would benefit from investments and new technology. In this sense, it was a relatively "low-hanging fruit," as many developing countries were eager to attract such investments and technologies.

Now it was just a matter of finding a way to get the rich countries to sign.

If they included a simple and understandable method to get started with emission reduction in the text, it would be easier to reach an agreement. Their solution was to include something they called “The Clean Development Mechanism" or The CDM, which was to become the UN's own system for compensating for climate emissions in the agreement. The concept of climate compensation as a global phenomenon was born and ready to be scaled out into the world.

They followed a very simple principle, just like we know it today.

Rich countries sponsor climate measures in developing countries in exchange for carbon credits. Carbon offsets. For a given price, one buys an emission reduction, without having to do anything oneself. 1 credit corresponds to one ton of CO2 in the atmosphere.

Since one offers an intangible and invisible commodity, which, unlike physical goods, does not let the buyer see what they are buying, one needs a strict regulatory framework to ensure quality. A system is needed that controls and has requirements for documentation, measurements, and methods for this. To be able to verify and practice this in practice, third-party certifiers are also used. These are people who are accredited to check your claims based on a system and vouch for what you do. They give you approval to do this. A stamp you can show others.

The Dawn of a Worldwide Crusade to Eradicate Emissions Begins

There are many roads to Rome, and indeed many creative ways to carbon reduction measures as well. When you buy a credit, the money can go to various things such as investment in hybrid and emerging technologies, typically clean energy in developing countries, and projects that improve energy efficiency in buildings, industries, and the transportation sector, carbon capture and storage, preserving forests, planting forests, investments in renewable energy like bioenergy, solar, wind, water, and wave power. Afforestation and reforestation, bioenergy with carbon capture and storage (BECCS), direct air capture (DAC), enhanced weathering, ocean fertilization, ocean alkalinity enhancement, soil carbon sequestration, carbon mineralization, biochar, blue carbon ecosystems preservation and restoration, carbon capture and utilization (CCU), urban forestry and green infrastructure, building with biomaterials, peatland restoration and conservation, geological sequestration, ocean-based carbon removal.

Sometimes it can even be measures to make cooking more efficient, such as distributing meals to very poor families in Asia or Africa. It can be projects that help local communities adapt to climate changes, for example through better water management or agricultural techniques.The list goes on, and on.

To measure the effect and find the right price, there is a standardized process that approves the projects and calculates how much emissions they reduce.

Just as Klondike attracted gold diggers, this market attracts modern gold diggers and investors. In the early 2000s, this was an industry that really flourished. The market for climate compensation grew enormously fast and a number of climate projects were launched in Asia, South America, Eastern Europe, and of course in Africa. To a very large extent, it is about energy efficiency and renewable energy.

All this leads to increased attention around the purchase of climate credits. Beyond the official market regulated by the UN, a private, unregulated market has emerged. Here, interested parties can buy climate credits at a price that often lies below what is required in the UN's regulated market.

All that glitters is not gold. George W Bush said in 2001, shortly after he became president that the USA will not participate in the Kyoto Protocol, he believes it is uncertain whether humans can affect the climate, that it is detrimental to the US economy, and that it is unfair that large emitters like China and India get away.

What happens when a large and important buyer of quotas disappears? The demand decreases sharply.

Some hold out, and new solutions come. For example, in a cold and fjord-rich corner of the world where I happen to live. On January 1, 2007, Jens Stoltenberg (Globally more known as The Nato boss), in his role as Norwegian Prime Minister and leader of the Labour Party, held his second New Year's speech broadcast on TV. In the speech, he addressed several central themes that touched the nation and the world, such as war, poverty, unemployment, and elderly care. A particular focus area in the speech was climate change.

Stoltenberg emphasized the importance of action in meeting climate challenges. "We must take our responsibility. Climate emissions must be reduced," he said, adding that Norway should take a leading role in the fight against climate change. He highlighted the decision that the gas power plant at Mongstad should be equipped with CO2 cleaning technology, which he described as an important step to reduce emissions in Norway, (one of the worst polluters in the world, editor's note). "We will make this possible. It will be an important breakthrough to reduce emissions in Norway, and when we succeed, I think the world will follow. This is a major project for the country. It's our moon landing," said Stoltenberg.

We didn't hear much more about the moon landing, and soon the worst financial crisis the world had seen since the 1930s came. The world shook and the industry had huge troubles. When the industry goes down, emissions also go down, and so does the market for climate compensation. It almost completely disappeared. Many people called it a flash in the pan.

These guys had probably been waiting to say that.

Obviously the climate crisis did not disappear even though people stopped buying climate credits. Instead, it got worse and worse. Glaciers melted, crops dried out, storms and severe weather hit, and forest fires raged. More and more people open their eyes and understand that something is happening in the world. It should not be like this.

The time has come for an updated version of the Kyoto Agreement. But now it's serious. Everyone must be involved if we are to manage to stop this. When people met in Paris in 2015, it was with sky-high ambitions. We all know the Paris Agreement and the UN's sustainable development goals. I will not go into depth on the agreement, but I will quickly remind you that we agreed to keep warming below 2 degrees, but with a goal of managing to keep it to 1.5 degrees.

The first version did not last long because new research shows that the consequences with 1.5 degrees are much worse than first assumed. The agreement does not hold. We must tighten up and emissions must be reduced by 45% by 2030. The sum of all the world's emissions must be zero, at the latest by 2050.

The Paris Agreement is really good in so many ways. It is the first time almost all countries in the world (over 190 nations) have committed to common climate goals and the countries commit to nationally determined contributions (NDCs) to reduce their emissions, and these contributions should be increased over time. The agreement establishes frameworks for economic support to developing countries, to help them in both emission reductions and adaptation to climate changes. It introduces a transparent system for monitoring, reporting, and revising countries' progress, ensuring that they stick to their commitments, and the agreement recognizes the need to build capacity to adapt to the effects of climate changes, especially in vulnerable countries.

But the agreement has a big problem. Zero emissions are practically impossible. The timing is therefore perfect for welcoming an old friend to the party. Climate compensation can make its big comeback. The world is in a hurry to reduce emissions. We are talking about a drastic reduction. Interest in investing in such solutions to meet the goals quickly is increasing. Companies and countries come as agreed with declarations of their own goals. Now they must deliver on these goals.

But how are we going to do it? People don’t like decreasing their living standards.

Navigating Between Simplicity and Complexity

Of course, there is a simple solution. The world (aka us ) opts for the quick fix of the problem and regains trust in the system of climate compensation. We can't cut enough domestically, so we buy reductions in other countries. The condition of the planet is worse than it was 20 years earlier, and the best we have is still this compensation system. The alternative is to actually cut emissions, but few are willing to do that.

This raises a very important question. Does climate compensation work better now? Will it help us reduce emissions and achieve the goals? To get to the bottom of this, one should of course also look at how it has worked so far.

The Paris Agreement was adopted on December 12, 2015. The agreement was then opened for signing on April 22, 2016, which coincidentally almost cliché-like coincided with Earth Day that year.

Right afterwards, or even during the signing process, more specific in March 2016, the study "How additional is the Clean Development Mechanism? Analysis of the application of current tools and proposed alternatives" was published by researchers M. Cames, O. Harthan, L. Fussler, J. Barker, A. Böttcher, D. de Jager, G. J. Nabuurs, J. Resch, and A. Voß. They worked under Öko-Institut e.V, a research and consulting organization based in Berlin, Germany, focusing on sustainable development.

The study reviewed all CDM projects and assessed how many of them actually had a high likelihood of reducing emissions. The result showed that only about 2% (!) had such potential. All these CDM projects were both certified and approved by the UN, through accredited third-party certifiers. The projects were approved by the highest authority, but still, it was only two out of a hundred projects that were considered to have a high likelihood of actually reducing emissions.

A whopping 85% of the projects were considered to have a low likelihood of reducing emissions. Isn't that remarkable? A large majority, actually we can say that almost all UN-approved CDM climate compensation projects were meaningless. To put it very simply: They contributed to nothing other than moving money around in the system.

This is obviously not done deliberately, but something in the system has failed. It's natural to look at how on earth this was allowed to happen?

Money Can’t Buy Me Love

Money alone does not reduce emissions, so let's try to follow the money and see what it goes to. It's obvious that if the money is to lead to a reduction in emissions, then the money must also somehow contribute to this reduction. The reduction must come as a consequence of my financial contribution. This is called additionality.

Several researchers and environmental organizations have expressed concern that carbon credits and climate compensating measures often function more like "greenwashing" than as real solutions to the climate crisis. One reason they have found is that most of the projects would have been carried out anyway, even if I, or you, did not buy quotas and contribute money. In other words, my money does not contribute to emission reduction. For sure, the money can contribute positively, for example to economic growth, but then at best as an addition to growth that probably would have come anyway. But then without being supplied with money from climate credits.

Here are some concrete examples:

In South Carolina, the National Audubon Society has preserved an old forest since 1970, known as Beidler Forest. In 2013, they began selling carbon credits from this nature reserve, with project documents describing an aggressive baseline scenario for logging. However, the former manager of the reserve, Norman Brunswig, indicates that they never had plans to log the forest, suggesting that the project did not necessarily create additional climate benefits.

Dr. Joseph Romm, an American author and climate expert, has discussed the problems with CDM in his report. He points out that the main problems with CDM, such as lack of effect, inaccurate counting, and double accounting, have been identified for over two decades but are still unresolved, suggesting that these problems are inherent and intractable in the system.

Another study on the Clean Development Mechanism suggests that the program may have led to a significant increase in CO2 emissions in the atmosphere, as much as 6 billion tons.

This is partly because many of the projects that received carbon credits under the CDM would likely have been carried out anyway, without the need for subsidies from the CDM. This is based on research conducted by the team from the Grantham Research Institute on Climate Change and the Environment and the Centre for Economic Performance at the London School of Economics and Political Science (LSE), Georgetown University, the University of Virginia, and MINES ParisTech.

The researchers developed a new method for identifying 'wasted' subsidies and used it to provide systematic evidence of the misallocation of carbon compensations in the CDM. They analyzed 1,350 wind power plants in India and found that at least 52% of approved carbon compensations were allocated to projects that were likely to have been built anyway. The result of this misallocation was not just wasted resources, it also led to a net increase in global carbon dioxide emissions.

Eli Mitchell-Larson, a climate researcher at the University of Oxford and co-author of the Oxford Offsetting Principles, has expressed concern that some conservation organizations do not take seriously the credibility of the carbon claims they promote. He points out that selling credits for land that would have been preserved anyway does not contribute to combating climate change and that this could instead hinder the global response to the climate crisis.

A good example of this can be the statements from Charles Canham, a forest ecologist at the Cary Institute of Ecosystem Studies and a long-time board member of a local division of the Nature Conservancy. He has also expressed concern, and he has criticized the Nature Conservancy for their approach to carbon projects and has highlighted that the organization has sold carbon credits based on forests that were never in danger of being cut down. This, according to Canham, gives polluters a license to emit large amounts of pollution based on these projects.

This is in line with Barbara Haya, the leader of The Berkeley Carbon Trading Project, who points out that the "vast majority" of carbon compensations are not real or are overestimated, or both. Haya emphasized that many of these compensations, especially those involving avoidance of deforestation, can be "phantom credits" that could actually exacerbate global warming.

A report from the Penn Center for Science, Sustainability, and the Media has also claimed that many of the carbon compensations in practice are ineffective and that in some cases they may allow polluters to continue their emissions unchanged while creating an image of being environmentally friendly. Laurence Tubiana, who was France's chief negotiator during the Paris Agreement in 2015, has warned against greenwashing, and especially pointed out the use of carbon compensation in oil and gas companies' plans for carbon neutrality.

This is a problem because when rich countries compensate by investing in projects, mostly in poor countries, they have on paper reached their goals. But they have not reduced their own emissions and rely heavily on purchased credits. At the same time, we have hopefully and unfortunately agreed that for this to be an actual reduction, it requires that their financial compensation is actually used to reduce emissions. We have also unfortunately found proof on that many of the projects would have been implemented anyway.

In India, it is well documented that most of the wind farms would have been built without the money from rich countries. This means the money is not used for compensation and has actually not made any difference.

The irony is that rich countries can reap honor and credibility for an emission reduction while net emissions in the atmosphere increase. Isn't this a fantastic system?

What if these countries had all made the cuts at home? Not that it will result in big consequences for them anyway. There is no register or database that tells this to the outside world. Everything looks perfect, great, green, and nice on paper, in annual reports, and in the marketing department and the company itself probably believes that everything works. The reason the system doesn't work lies not primarily with the buyer.

The UN has a control system with third-party certifiers that in theory should capture and counteract this, but unfortunately, it doesn't work, the number tricks are not caught and the credits have a negative contribution instead.

Both experience and studies show that it is too difficult to control the thousands of climate projects that exist. But not only are the projects difficult. Often the certifier is the problem. He/she/they should ensure that everything goes correctly, but that in itself is not always easy. Sometimes they have incentives for quick approval. For example, there are a number of studies showing agreements between companies and third-party auditors where it also emerges that they get a bonus for approving the project.

A quick approval of the project contributes to quick validation at the UN. Being quick is more profitable than being slow. A swift bureaucratic process must then be rewarded properly. It goes without saying

Recycling is Good for the Climate, Right?

Credits are really just numbers. They're not tangible, you can’t even see them. Therefore, it frequently happens that the same credit is recycled or reused by several countries. Since it's actually possible to sell it multiple times. When something is possible and beneficial for someone, that's often what's done. But the emission reduction can only happen once. The regulations clearly state that it should only be counted once and it should be registered to prevent reuse. Unfortunately, there's a difference between theory and practice. It has proven too difficult and requires a high degree of transparency.

People struggle to use complicated systems, and honestly, many don’t care either.

This wasn't a big problem until the Kyoto Protocol was to be replaced by the Paris Agreement. Suddenly, all countries had to reduce their emissions. Before 2015, only developed countries had to reduce emissions, while developing countries had no such requirements at all.

This sudden change, had an unexpected effect. Both the buying and selling countries claimed credit for the same carbon credit. The same 'emission reduction' was recorded twice. This was quickly discovered, and measures were implemented to counter the problem of double counting. In the new rules, it was established that the seller, the country selling, had to renounce the right or ownership of the credit once someone had paid for it. It was now only the buyer who was allowed to use the credit in their climate accounting.

This sounds logical and surely had good intentions. But to put it simply, this system is completely nonsensical. I mentioned Joe Romm, and he has explained this well:

"The rich countries are allowed to say or pretend they have reduced their emissions, even though they haven't, while the poor country must pretend they haven't reduced their emissions, even though it was actually them who did it."

Please read the sentence again. (I recommend to read more here)

In practice, this means that since the poor countries let the rich countries use the cheap, or cost-effective as many like to say, emission reduction, the poor countries will have to enter the market again and buy back those tons of carbon. They have to pretend they didn't make this reduction earlier, and double counting is not allowed.

In other words, this makes it difficult for developing countries to reach their climate goals. It's expensive to be poor.

Climate compensation, intended to contribute to fewer emissions and distribute money from rich countries to poor ones, instead contributes both to increased emissions and to maintaining the very skewed power balance in the world. If you're rich, you can continue to spew out greenhouse gasses, but if you're poor, you're actually responsible for reducing both your own emissions and the emissions of the rich countries.

What a brilliant and fair system.

Fortunately, the UN has realized this themselves, and they are currently phasing out the heavily criticized CDM system. It will be replaced by a completely “new” system. The SDM system. Sustainable Development Mechanism. Remarkably similar, don’t you think? But it's hopefully better. At least it's said to be better adapted to the Paris Agreement, and the ambition is to avoid problems like double counting and unfair distribution. (We can delve more into this when it's up and running).

I should mention the EU's quota system too. It's a bit better because there's an overarching control there. In this system, which includes industry and aviation in the EU and EEA countries, including Norway, a quota corresponds to a permit to emit one ton of CO2.

Let’s explain the EU climate quota system using a metaphor. Try to think of the atmosphere as a communal garden that everyone in the neighborhood (the EU countries) uses to dispose of their trash (greenhouse gasses). However, there's limited space in this garden, and too much trash will ruin it for everyone.

To manage this, the neighborhood council (the EU) gives each household (country) a certain number of trash bags (carbon quotas) each year. This number is based on the size of the household and how much trash they've historically produced. The fewer bags you use, the less you contribute to polluting the garden.

If a household is efficient and produces less trash, they might end up with extra bags. These can be sold to neighbors who are struggling to stay within their limit. This creates an incentive for everyone to produce less trash, as you can make money by being more environmentally friendly.

Over time, the council reduces the number of bags each household gets, encouraging everyone to continuously find ways to produce less waste and protect the communal garden.

Hopefully this metaphor illustrates the EU's system of cap-and-trade for carbon emissions, where the total allowed emissions are capped and reduced over time, and countries or companies trade emission allowances to stay within their limits.

Now. Let's set aside the bureaucracy of the UN and EU for a while and take a look at the private market.

Now, that is an entirely different kind of party. A no rule party!

Conscience for Sale. Buy one, get two! ( or three, or four )

It's not just countries that want to become carbon-neutral; this goal also applies to companies, organizations and private persons. Apple aims to achieve this, Nike does it and even Shell plans to become carbon-neutral by 2050.

In the travel industry, several companies claim they will become carbon-neutral. Ving, a Scandinavian charter tour operator, caught my attention with their advertisements for sustainable and carbon-neutral charter trips. Intrigued by these memorable ads, I decided to delve deeper into what they actually claim about the matter. Their website states: “Ving compensated for all travels from 2019 to 2022. They have invested in wind and hydropower projects in Turkey, India, China, and Sri Lanka. Certified projects that meet the criteria of the UN's Clean Development Mechanism (CDM) or the Gold Standard, a quality standard launched by, among others, WWF. The investments are made through a partnership with Natural Capital Partners, NCP, a world leader in solutions for emission reduction, and STX Commodities.”

It also states that climate compensation is not a long-term solution, (wow!) and from October 1, 2022, Ving is focusing on new, modern solutions that can contribute to reducing their emissions, where air travel accounts for the largest part of their emissions. They will therefore invest in new technology for more sustainable aviation fuel, SAF (Sustainable Aviation Fuel), as part of the company's long-term ESG strategy. (SAF is btw also controversial and at best a temporary solution since it emits as much CO2 into the atmosphere, and with the extremely low margin in aviation, the industry will never afford the transition, but that is a topic for another article).

Unfortunately, believe it or not, there are many certification schemes for sustainability in the travel industry that require the purchase of carbon credits. So, perhaps it's not surprising that major players like Radisson and MSC Cruises say they are on their way to becoming carbon-neutral?

We might agree that the public and regulated market does not work very well, but at least there is an overarching international responsibility and control from the UN or a similar organization.

That's not the case in the private and unregulated market.

Of course, there are a bunch of certifiers who issue the credits, but their methods and requirements vary greatly. There is no global regulation, so it is called the voluntary market. The private market is indeed based on voluntariness since individuals and private companies, unlike countries and government organizations, have no formal requirements to reduce their emissions. Instead, there are other incentives driving the need for climate compensation.

Remember how I initially compared compensation to indulgences? The biggest incentive for private individuals, for example, people traveling, is to buy peace of mind. I'm not saying that one should feel guilty, but most people are probably feeling a bit of guilt now as the world is heating up.

Undoubtedly, there is a market for bad climate conscience. The large turnout at school strikes and demonstrations for climate change shows this. Personal consumption and air travel are problematized on a completely different scale than before we started feeling the changes physically. Being concerned about the climate has moved from activism to becoming mainstream. It's not just politicians and companies that feel the pressure, it's also felt among the general public. Many companies, by the way, take the indirect approach, where they leave it to the customers to buy quotas, while they themselves take the applause for the initiative, and are praised by people with a SDG pin in their suit jackets. You know the kind of people that are concerned about being concerned about climate change.

Anyway, the general public also buys quotas. In a way, they have bought their freedom, and theoretically they have their back covered.. A kind of indulgence letter, where you buy your way out of sin by "contributing" to emission reduction elsewhere.

For example, a good study has been done on this “Trustworthy or misleading communication of voluntary carbon offsets in the aviation industry” Surrey by Mireia Guix, Claudia Ollé, and Xavier Font at the University of Surrey.

Just as televangelism and phone-based religious counseling are criticized for playing on guilt, part of the criticism against climate compensation, especially in this voluntary, unregulated market, has been about such schemes appealing directly to consumers' guilt and giving them an opportunity to make amends. In this way, it helps to justify behavior associated with large emissions. The business idea is clear, now it is all about finding the right price.

I think calculating a price of conscience is something Jeremy Bentham and his cronies would have liked. Evaluating conscience based on a cost-benefit analysis is utilitarianism of the good old sort. Maximizing utility and pleasure over pain. This is something several private actors have understood.

Fly me (carbon neutral) to the moon

I will use an example from the travel industry. The Norwegian company Chooose has literally soared high on this business idea of buying freedom. They have received a lot of attention and grown significantly by tempting customers with "carbon neutrality". Chooose has received massive criticism in Norwegian media and among experts who analyze the carbon market.

By buying and deleting carbon quotas on your behalf, Chooose promises to “eliminate” more CO2 than you emit. According to Chooose, you can not only claim to be carbon-neutral but also call yourself “climate positive”. All you need to do is to subscribe for “the price of a cappuccino a month”. Chooose has also run a rather fresh and appealing image. They said that while other climate friends were “green and grumpy”, Chooose was “pink and positive”, and they have outright stated at times that good conscience could be bought.

“I believe the marketing from Chooose has been dishonest and misleading, and it's almost impossible for consumers to uncover that,” says Hæge Fjellheim, head of carbon market analysis at Refinitiv to Dagbladet. One reason was that Chooose, both on their websites, in advertising, and in direct communication to customers, claimed that the quotas they buy and delete are “emission permits” that “big polluting baddies” need. By “capturing” the emission permits in front of the industry's nose, Chooose claimed to be a kind of “Robin Hood of the quota market”.

In Dagbladet, we could also read that Gilles Dufranse, an advisor at the Carbon Market Watch organization in Brussels, states, “It looks like they come with rather grand promises, and we strongly disagree with the content of them.

Beyond the challenges of understanding the technical aspects of the quota market, Dufranse believes that many who buy quotas to offset their own emissions, make a “fundamental fallacy”.

Buying quotas to compensate for the emissions from flying around the world four times a year is not taking action for the climate. It is fundamentally incompatible with meeting the world's climate goals, he says.

Despite criticism of their products and claims of misleading marketing, Chooose has become a significant player in climate compensation, especially in the travel industry. On the Chooose website, British Airways states:

“We know that many of our customers want to fly with sustainability in mind and while we work on delivering our own short-, medium- and long-term initiatives to achieve net zero emissions by 2050, we know many of our customers want to take action today too. This new CO₂llaborate platform further empowers our customers to make sustainable choices when flying with us. We look forward to working with CHOOOSE to evolve the platform as we continue to drive the decarbonisation of our industry.”

I cheer for Norwegian companies that want to go out into the world, especially climate focused startups, but I am very cautious about recommending solutions that in practice help you with so-called greenwashing. There are plenty of travel companies on the customer list, everything from Booking.com, Trip.com, SAP, Amadeus to Southwest Airlines, and many more.

I believe few will get away with such claims in the future.. The EU will prohibit environmental claims such as “carbon-neutral”, “net zero”, or “eco” by 2026 unless companies can prove that the claim is correct, as they wish to crack down on greenwashing of consumer products.

The rules, adopted in September 2023, will also prohibit claims based on quota purchases – often used as the basis for claims that products are carbon-neutral or have reduced environmental impact – along with “green” labels that are not from approved sustainability schemes.

There is a slight difference in how a company uses compensation compared to how you and I use it. A company uses it due to requirements or to promote itself by saying that it is carbon-neutral. You and I do it for conscience or for bettering our image. I am naive enough to believe that some also buy it because they actually want to do something good. They just don't know of other ways. It is understandable. You want a solution. A package. Pay 10 USD, and we'll plant a tree to compensate for your purchase. It's not surprising that one chooses it.

Now. Let's talk about trees.

No Trees Grow to the Sky

In the regulated carbon market, the focus is mainly on wind power and other renewable energy, whereas in the private market, tree planting dominates. The main idea with tree planting in this context is that trees absorb and store carbon. When a tree is cut down, this stored carbon is released and can eventually end up in the atmosphere. To counter this, organizations offering carbon credits step in to protect the forest from being cut down and destroyed. This is financed by private entities sponsoring tree planting and forest protection, in return they are receiving carbon credits. This practice aims to contribute to reducing carbon emissions by maintaining and increasing the number of trees that can absorb CO2 from the atmosphere.

For the protection of trees through carbon offset projects to have a real impact, the trees that are protected must actually be at risk of being cut down. If the trees are not threatened, the effectiveness of such measures is greatly diminished or non-existent, right?

Bloomberg, through journalist Ben Elgin, has investigated claims by companies of significant emission reductions. Several of these companies have used carbon offsets to meet their climate goals. However, Elgin found that the environmental claims of many of these companies do not match reality when examining the individual carbon offset projects more closely.

I previously mentioned the Nature Conservancy, and it is relevant to use them as an example here. After all, they are the world's largest environmental organization with long-standing traditions of commitment to environmental issues. In recent years, they have also expanded their operations and now work closely with many large companies. What many large companies have in common is that they have started to talk more and more about sustainability. Many have even started to talk loudly about it and actively use it in their marketing. Such companies also have in common that it is difficult to change their operations. They are too big, their investors are powerful, and there is a lack of both will and ability.

Some of these companies that choose to collaborate with the Nature Conservancy are JP Morgan, BlackRock, and Disney. They can make some simple symbolic actions themselves, such as removing plastic straws or putting vegetarian food on the menu, but they do not make big changes in their operations. Instead of changing themselves, they can buy carbon credits.

A project they buy credits from is Pennsylvania Ridges, not far from Philadelphia. At the end of the 1990s, a huge area was threatened by logging. To preserve the area from destruction, the Nature Conservancy goes out and collects enough money from a number of local philanthropists so that they can buy this land area. The Nature Conservancy then goes out on their websites and in the media and declares that they have saved nature. The threat is eliminated.

20 years pass by. The area that the Nature Conservancy bought in the 90s is suddenly threatened again. Despite having bought and saved the area, they say that 72% of the trees are at risk of being cut down within the next five years. Again, they need to raise money to save the forest, but this time they will not try to get the money from local philanthropists. This time they will offer companies and private individuals to contribute to saving the forest by buying carbon credits.

Ben Elgin goes through this carefully and his findings confirm that it is the same area. This seems very suspicious. By paying for carbon credits, you can contribute to saving a forest, which admittedly does not really need to be saved. It is already saved! The Nature Conservancy already owns the forest and therefore they decide whether the forest should be cut down or not. So when BlackRock, Disney, and JP Morgan buy credits from this project and claim that they have lowered their emissions, that is not true. It is a false claim.

It is something sad about it all. Because trust in the system is weakened. This case is special because this time it's not just some cynical investors behind it. It is the world's largest environmental organization that is behind it. Those who work at the Nature Conservancy and those who volunteer do so because they have a deep commitment and good understanding of the climate crisis and everything it might entail. Yet they choose to see carbon credit as easy money, yet they choose to make a series of false claims about emission reductions.

It's not certain that the Nature Conservancy does this consciously. Perhaps it's just sloppiness in the system and a lack of investigation? It excuses nothing, but it might help to explain. In its own explanation of this scandal, the Nature Conservancy has defended itself by saying that they are just following the rules from the certification company. Rules that are meticulously calculated and set to be absolutely sure that such projects actually contribute to reducing emissions.

The man who sold bought the world

The error obviously lies not in individual projects when it happens time and again. Maybe we need to go to the system itself. There is no doubt that loose and incomplete regulations are an important cause of the projects becoming meaningless. Is it those who create standards and regulations that we need to take? Such actors as Gold Standard, Climate Action Reserve (CAR), Verified Carbon Standard (VCS), and American Carbon Registry (ACR)

Now, it's of course easy to criticize these actors. But they have actually embarked on a task that is almost impossible to manage. The balance is delicate. On the one hand, the rules cannot be too strict, because then it is almost impossible to start such projects, while on the other hand, you lose more and more credibility and effect the more you loosen the rules. In many ways, you have lost before you have started.

Therefore, there are many examples of such projects that are not as good as they claim. One of the most frightening projects I read about recently.

In Norway Liberia is probably best known for the fact that the soccer star George Weah is president, for constant conflicts and not least that big Western shipping companies like Stolt Nielsen and Frontline register their boats in Monrovia to avoid paying taxes and to avoid dealing with labor rights and wages. But Liberia is also a land of natural richness. 70% of the country is covered by rainforest. Africa's lungs they call it. Hosting an enormous biodiversity and enormous amounts of stored CO2.

The rainforests are not only attractive to nature lovers and adventurers. Where CO2 is captured, money can be captured. Where a lot of CO2 is captured, a lot of money can be captured. Not necessarily from local investors.

The company Blue Carbon LLC, owned by a member of the royal family in the United Arab Emirates, is now buying a million hectares of forest in Liberia. A million hectares is an area as large as Lebanon. Over a period of 30 years, they will protect the forest from logging so that they can sell carbon credits to other countries and companies. Around 10% of the poor country Liberia's forests will be used to compensate for emissions made somewhere else.

The agreement was signed and prepared for public announcement at COP 28 in Dubai, according to the French newspaper Le Monde. It also revealed significant investments in Tanzania, Zambia, and Zimbabwe. Le Monde writes:

"With a handshake and a discreet smile, Sheikh Ahmed Dalmook al-Maktoum, accompanied by the Liberian finance minister, gave nothing away in front of photographers on March 25. The young member of the ruling family of Dubai, one of the seven emirates in the United Arab Emirates (UAE), had just signed an unprecedented memorandum of understanding with Liberia. Under the terms of the agreement, the Liberian government will grant the company he heads, Blue Carbon LLC, exclusive rights to one million hectares of its forests – 10% of the West African country's total forest area – for 30 years.

"This bilateral association marks another milestone for Blue Carbon," the prince told the Emirati press. The aim is ambitious: to "help transition to a low-carbon economical system by enabling governments around the world reach their Net Zero goals in compliance with the transferability of credits under Article 6 of the Paris Agreement." The "credits" referred to by the sheikh are carbon credits, which companies can buy to avoid having to reduce their emissions.”

This will be one of the world's largest carbon credit projects. Critical voices believe this could lead to human rights violations, as almost 10% of a whole country is sold to a private company. What will it lead to for the population there? The population was never asked. The area is populated by poor farmers. They risk being displaced.

Many NGOs and experts in the field fear that this is just a gimmick and a large greenwashing initiative. For such a project to really make a difference, the forest should remain untouched for 100 years. This project will only last for 30 years. If the forest is cut down in 30 years, then the CO2 that was to be reduced is released. In that case the project has not contributed to reduction. Critics believe that the royals in the UAE just want to embellish their emissions to meet climate goals and continue with their emissions undisturbed. A bit like Norway then. We should not throw stones from a glass house, should we?

One might think that the examples with the Nature Conservancy and Blue Carbon LLC were exceptions. A couple of rotten eggs in the basket. Unfortunately, it's not like that.

The nature protection system is neither nature friendly, protecting, nor a system

At the beginning of 2023, several media outlets, including The Guardian, conducted an investigation into climate compensation projects in the rainforest. These projects, approved by VERRA, the leading certification company in the private market, were examined to assess their effectiveness and impact. A journalist once said that these projects are about as effective as prayer and homeopathy combined.

VERRA is big. They approve as much as 3/4 of all climate compensation projects in the private market. 40% of the projects that have been approved are part of their rainforest program. These projects mainly focus on preserving forest areas at risk of being cut down. This type of forest conservation is currently the most popular method of climate compensation.

Among the buyers are large companies such as Shell, Disney, Gucci, Easy Jet, and even my old idols in the music group Pearl Jam. However, it has been proved that 94% of the projects certified by VERRA are not effective from a climate perspective. Although some of the projects have contributed to increased biodiversity, the majority have either been without real value or have actually also contributed to increased CO2 emissions. In light of these findings, climate compensation based on protecting existing forests does not seem to be a particularly effective solution.

If you tell a joke in the forest, but no one laughs. Was it a joke?

The other popular tree-based method is to plant trees or forests. At least treeplanting is very tangible, it can't be faked, or can it?

Tree planting as a carbon reducing strategy is based on the idea that trees absorb carbon as they grow. The idea is to plant trees in places where they would not normally be planted, and by ensuring that these trees are not cut down over a certain period, a certain amount of CO2 will be stored in them. The amount of CO2 stored can be calculated by measuring the tree's diameter and using a formula that takes into account the tree's type and density, i.e. its ability to store carbon.

It is logical to think that CO2 stored in trees can somehow be used for climate compensation. Trees are good for the environment and act as natural carbon stores. They are also home for thousands of living creatures.

There are certainly many situations where planting trees can be a win-win, especially when done correctly and in suitable places. There are also many successful small-scale projects that involve the local community in management and utilize other benefits of trees.

Agroforestry is a good example of a positive practice. This method combines tree planting with agriculture, where the trees function as useful crops. This strengthens small-scale agriculture and provides benefits such as food production. Financial support from external sources can really make a difference in such cases. Urban planting is good.

There are many projects that are both effective and valuable, even though they can often be more expensive than the cheapest carbon credits. But there are also negative examples of projects that resemble plantations behind fences, which exclude the local population. Such plantations are often monocultures, where only one type of tree is planted in long rows without other crops. Trees such as eucalyptus and bamboo are popular choices, as they are cheap, require little care, and are effective for CO2 storage.

Monocultures can threaten local plant species. For example, in South Africa, acacia trees have been used, but they tend to invade the area, and significant resources must be used to remove them. (This can't be directly compared as it has nothing to do with climate quotas, but I have to mention the project with Sitka spruce planting in Norway. Few species tolerate salt water and wind as well as the Alaskan sitka spruce. This was one of the reasons why sitka was planted along the coast during the so-called forestry period between 1950 and 1980. The forestry case was supposed to help with the reconstruction of Norway and ensure economic growth in forestry. They never predicted what would happen. The Sitka spruce displaces everything else where it gets a good foothold, and now big resources are spent trying to eliminate it.)

Anyway, such monocultures, in addition to being hell for biodiversity, are worse at storing CO2 compared to varied forests, and they are more susceptible to diseases that spread in species. When such forests die, the stored CO2 is released back into the atmosphere.

Myles Allen, head of the Climate Dynamics Group at the University of Oxford, has stated that even though "heroic forest raising" can actually contribute, it cannot be a solution to the continued use of fossil fuels.

I was born an optimist and believe everything will work out, but as I've gotten older, I've started to like having facts as a basis for my optimism. Therefore, I want to believe that it is possible to plant forests correctly for humans. We just need to copy nature, since nature manages it on its own.

But, still, will it help?

Here is a thought experiment. Imagine if we actually succeed. Imagine that we can plant a forest that effectively reduces CO2 emissions, avoids monocultures, promotes biodiversity, is resistant to diseases, and is cost-effective and all that.

Even then, we face a significant challenge: Where will all these trees be planted?

The Guardian has conducted analysis on several large companies and their climate goals and also calculated the areas that would be necessary to reach these measures.

At the top of the list is Shell, which will need a forest the size of the entire drought-stricken Italy to compensate for 35% of its emissions by 2050. The entire Italy for 35%.

When large oil companies like Shell and Exxon state that they plan to achieve climate neutrality by compensating for their emissions through tree planting, it tells a little about the challenges we face. If everyone were to compensate for their greenhouse gas emissions by planting trees, it would require an area equivalent to five Earths.

The UK's air travelers alone will need areas equivalent to half of the UK's agricultural land to plant enough forest to compensate for their emissions.

In many cases, people in poor countries, who are completely dependent on agriculture to produce food, are displaced to make room for tree planting. For example, in Uganda, 6000 people were moved to make way for a forest planting in a Norwegian project, where the customer was the Swedish state.

The local population is often moved by force, and the consequences are significant: children have to travel far to get to school, people have to travel further to cultivate land, and poverty increases. Carbon Brief has investigated 62 projects for climate compensation and found that 44 of these appear to have negative consequences for the local population, especially in South America. The majority of these projects have resulted in the local population, who have farmed these areas for generations, being forcibly relocated.

Of course, there are many projects that work well, that contribute positively to the climate without limiting the lives and opportunities of the local population. It is important to remember that the local population is not a homogeneous group; some may experience negative consequences while others may have benefits, even from the same project. It's not like everyone in Venice or in Barcelona has the same level of enthusiasm when the cruise season starts either, is it?

Each project can also affect the local balance of power. The introduction of a project can increase the risk of local conflicts. Areas are bought, and this can lead to changes in boundaries, prices, and other social dynamics.

These and other problems are often not mentioned by those who sell carbon credits and compensations in their marketing materials. There is a tendency to focus on the positive aspects of climate compensation projects, while the potentially negative consequences for local communities are not as well illuminated

Not sure how to contribute, and not sure if it contributes

As a consumer, navigating the landscape of climate compensation projects can be extremely challenging. It requires extensive knowledge and research to distinguish between good and bad projects, which often seems overwhelming. Due to this complexity, many, including myself, choose to stay away from such schemes. I have never bought quotas privately or through my businesses. It's too difficult to know what's good, even for a nerd like me.

Instead, I've gone for other types of projects. (For example, removing ocean plastic through Empower.eco, which I've unfortunately have become very unsure about the effect of too btw.)

It can be said that this is regrettable for the actors who can actually make a positive difference, but unfortunately, there is too much uncertainty about whether they also have any real effect.

Fortunately, several rules have been introduced that limit the use of compensation to claim climate neutrality. It is now prohibited in many contexts, and our leader, the EU, is conscious of this issue. While many claim they will find solutions in the future, it's still an open question how we can effectively remove carbon from the atmosphere. Some new projects focus on carbon capture and storage (CCS), which potentially can neutralize emissions by capturing carbon directly from industrial sources or directly from the air.

These technologies are still under development, but they represent a hope for more effective solutions to tackle climate change.

Carbon capture and removal involves taking carbon out of the Earth's cycle and storing it in a way that prevents it from returning to the atmosphere. One method is to suck carbon directly from the atmosphere. There are facilities, for example in Iceland, that do just this: CO2 is extracted from the air and pumped into the ground, where it is supposed to be converted into stone over time.

However, such solutions are not without challenges. Even though it is promising, it requires enormous amounts of energy. This can paradoxically lead to increased emissions, unless the energy source used is completely renewable. Another major obstacle is the costs. Carbon removal through such technologies can be up to 100 times more expensive than traditional methods such as forest planting.

There is little chance that they will be bought on any significant scale before they are considerably cheaper. Due to the costs and the fact that conventional carbon credits are still allowed, most companies continue to use the more traditional and cheaper solutions.

The technology to capture CO2 and store it in the ground has become a kind of pipe dream for large parts of the industry, especially for the oil and gas industry. For example, Carbon Engineering, one of the leading companies in CO2 capture and storage (CCS), was bought by the oil company Occidental Petroleum in August. This acquisition does not necessarily reflect a commitment to protect the climate, but rather because this market is very profitable for the oil industry, which also sees the possibility of pumping CO2 into the earth's interior.

In simplified terms, the opportunity can be explained as follows: By pumping concentrated CO2 into a depleted oil well, one can increase the pressure in the well. This can make it possible to extract more oil and gas, while achieving the apparent advantage of being able to claim that one is producing climate-friendly or carbon-neutral oil and gas.

The collection and storage of CO2 can thus become a lucrative extra income for the oil and gas industry. Norway, which accounts for about 2% of the world's oil extraction, also has a project where CO2 is stored under the seabed in the North Sea.

Norway is very neatly positioned to have it both ways. We earn well on fossil energy while we also will earn on facilitating space to compensate for the use of fossil energy.

Traditionally, the ideal for compensation has been that the polluter pays, while smart Norway has managed to turn this into the polluter getting paid.

Even though the technology for CO2 capture is still under development, is expensive and has limited efficiency, and even though it is mainly the energy industry that benefits from it at the moment, everything indicates that we will soon be highly dependent on this technology. Today, about 55 billion tons of CO2 are released annually.

According to the UN, both the 1.5- and 2-degree targets for global warming are already unachievable without immediate and significant reductions in emissions.

Even if we succeed with CO2 capture, we are still dependent on massive emissions reductions to avoid a temperature increase of 3 degrees by 2100. This illustrates the need for a combined approach – we must both develop and improve CO2 capture and storage technologies, while making significant cuts in global greenhouse gas emissions.

One method that is exciting and worth mentioning is storing carbon in biochar, Carbon storage with biochar aims to reduce greenhouse gas emissions by converting organic material into biochar, a form of stabilized carbon (barbeque charcoal is an example of biochar). The process involves pyrolysis, which is the thermal decomposition of organic material at high temperatures in an oxygen-poor environment. A good idea really, but it quickly becomes more problematic when the biochar is to be used in agricultural soil.

In 2022, the Environmental Defense Fund found in its "State of the Science" report that there is uncertainty about the extent to which agriculture can be used effectively to bind carbon dioxide to reduce climate change. The World Resource Institute has also pointed out that many soil carbon practices have insufficient documentation and can be ineffective or reduce crop production.

Soil carbon credits, which compensate for soil carbon loss, require further evidence of their effectiveness. These methods are more adequately described as "carbon recovery" rather than carbon removal. The use of soil carbon certificates as climate measures is problematic, with studies questioning their accuracy and the need for extensive input to be reliable.

A study from January 2023 points out that including saturation factors reduces the potential for SOC binding to affect climate change by 53%-81% towards 2100. There is also little evidence that increased SOC sequestration leads to better crop production. SOC stands for "Soil Organic Carbon," which in Norwegian means soil organic carbon. It refers to the amount of carbon that is stored in the soil's organic material. This is an important element in the soil's carbon cycle and plays a critical role in both agricultural productivity and in regulating atmospheric CO2, and thus in managing climate change.

These findings underscore the scientific uncertainty and limitations of soil carbon sequestration. It is important that the EU waits to certify methods for soil carbon quantification and issuance of carbon credits until there is greater scientific consensus. Although regenerative agricultural methods have other benefits, carbon credits should be handled with caution, given problems with duration, additionality, and leakage.

At least it cannot be used to claim carbon neutrality.

Connor Nolan at Stanford University has researched the effectiveness of various CO2 capture methods. His study focuses on the total potential for carbon removal through methods like tree planting, carbon sequestration in fields, bioenergy with carbon capture and storage (BECCS), and other techniques that do not compete with biodiversity or agriculture.

The conclusion from Nolan's research indicates that nature can potentially contribute an additional 100 to 200 billion tons of carbon removal over the next hundred years. Although this is a significant amount, it only accounts for 10-20% of the 1000 billion tons that, according to calculations from Carbon Brief, need to be captured over the next century. This means that we cannot rely solely on natural solutions; we need a broad range of technologies. No single method can handle the entire problem alone.

It's important to continue working even if we haven't reached the goal yet, and even though there are many "rotten eggs" in the industry. Like many other industries, there are both good and bad players in the field of climate compensation, and it's important to gain knowledge and support the positive players.

The hope is that the good actors will make progress and maintain the credibility of the entire industry.

Things do not change until we change

When it comes to individual compensation, there is no simple answer as to whether one should do it or not. But it's important to remember that compensation should be a last solution, after doing everything else possible to reduce one's own emissions. The problem today is, as we started by saying, that many see the purchase of carbon credits as a way to "buy themselves free" without first cleaning up their own emissions. A form of indulgence for one's sins.

As long as there are opportunities to buy oneself free from emissions, people will continue to use this as a shortcut instead of taking responsibility for their own emissions. This diverts attention from what is important – reducing our own emissions from travel and consumption.

We cannot continue to live and consume as we do today

Large companies are often not structured for dramatic changes. They can be locked into their existing operations and dependent on demand from us consumers. While they can make certain adjustments, it's difficult for them to undergo fundamental changes. The engine of their business is consumption, and if we reduce our consumption, it can profoundly affect them.

The huge and State owned oil company in Norway, Statoil changed its name to Equinor in 2018 and simultaneously announced that this was a step in a major transition from oil to renewable energy sources. We were supposed to quickly see progress. It has been a few years and countless PR campaigns since Statoil became Equinor.

In Equinor's 2022 results, we get a small indication of what proportion is actually renewable. What has happened in five years and countless PR campaigns after Statoil became Equinor?

The answer they give us is 0.13 percent. This means that 99.87 percent of the energy produced by the renewable energy company Equinor is still fossil. In addition, their emissions have increased in recent years, and in their own "sustainability report," they write that they wish to increase investments in oil and gas by 20 percent towards 2026.

The biggest problem with Equinor's transition is not that it's too slow. The biggest problem is that the transition has not started at all, at least not outside the marketing department.

I have more faith in smaller companies. They are often more agile and can adapt more quickly to a new climate reality. My hope is that the old giants experience a "Kodak moment" and fade out in favor of a new generation.

In this landscape, it's important to be conscious and responsible as a consumer, and to support the solutions and companies that truly contribute to a sustainable future. It's a complex field, but by informing ourselves and making thoughtful choices, we can all contribute to a more sustainable world.

Indulgence is for the church, and since I'm not planning to go there anytime soon, Ill focus on reducing.

I read more than 40 studies articles and a lot of articles and other in the research. Here are some:

EthicsClimate

Håvard Utheim

Håvard Utheim is a strategic advisor, concept developer, with a focus on innovation, sustainability, and transparent communication in the travel industry and beyond. He is passionate about challenging the status quo and driving positive change

https://thetransparencycompany.no