The Carbon Offset Question
Can carbon offsets make your activities carbon-neutral? That's the main theme of this week’s Sustainable Futures Report. Yes it's Friday, the 15th of November and I’m Anthony Day. Welcome to this episode and thank you for listening.
Carbon offsetting has been in the news this week and I've been working on an analysis of the pros and cons for a client. What's the answer? Well, it's certainly not simple as I shall attempt to explain. And then, in other news, I look at the Shell Prélude, the Aramco share offer, a new oilfield in Iran, tree planting in Turkey, and what looks like a U-turn on fracking in the UK less than a week after a moratorium was announced. And in Australia the extent and intensity of the wildfires almost defies description. Is climate change to blame?
The Carbon Problem
For centuries prior to the Industrial Revolution greenhouse gases (GHG) in the atmosphere - mainly CO2 - were at about 280ppm (parts per million). By 1990 the level had reached 354ppm and 405ppm by 2017. The earth emits and absorbs CO2 naturally, and has kept the level in balance for the last 10,000 years. Since the start of the Industrial Revolution humanity has been adding more GHG to the atmosphere than the world can absorb, by burning fossil fuels and by managing the land. The concentration has grown and continues to grow. The more CO2 and other greenhouse gases in the atmosphere, the stronger the greenhouse effect drives global heating. At the time of the Paris Agreement scientists warned that increasing GHG would lead to a catastrophic rise in global temperatures and every effort should be made to limit it to 2℃ or even better, 1.5℃.
Many activities and industries lead to the emission of CO2 - from driving to flying to generating electricity to heating the home to manufacturing to ploughing the land and cooking the lunch. Some of these things can be done more efficiently, but some of them will always emit CO2. Hence the idea of offsets.
The theory of offsets says that if you emit CO2 but sponsor an activity which reduces emissions by an equivalent amount then your activity is carbon-neutral. In 1997 the UN established the Clean Development Mechanism (CDM), which promotes and validates offsetting projects, principally in developing nations. The CDM sells Certified Emissions Reductions (CER) at so much per tonne, depending on the type of project, and individuals and organisations buy these to offset their emissions. So far, so good.
The problem with these schemes is that they are what I define as “preventive”. For example, an offsetting project could involve providing communities with efficient cooking stoves to replace polluting open fires. The amount of CO2 emitted by the community is cut. An emitter buys a CER which represents that reduction and the money goes to pay for the new stoves. The problem is that while the project emits less, the emitter still emits the same amount, so there is a net increase in atmospheric CO2. Nevertheless, the UN considers that an organisation which buys enough CERs to match its emissions is carbon-neutral.
Contrast this with an offset scheme which plants trees. Trees do absorb carbon and lock it away, although the “average” tree takes 30 years to absorb one tonne. In this scenario, if you emit 1t but plant enough trees to absorb 1t then the net effect on atmospheric carbon is zero. You are truly carbon-neutral. I call such schemes “extractive” because they physically remove CO2 from the atmosphere. There are currently no forestry schemes approved by the UN’s CDM. Undoubtedly there are problems with relying on trees. While it takes 30 years to absorb 1t, a return flight to NY emits nearly 2t in a matter of days. The trees need to stand for 100 years or more - the time that CO2 persists in the atmosphere - but there are examples of plantations cut down and burnt well before that and of trees sold more than once. Then there’s the question of “additionality”, which applies equally to preventive schemes. Would these trees have been planted anyway? Has your contribution truly made a difference?
Something in the Air
This week BBC Panorama looked at emissions and offsets in the aviation industry. If you have access to iPlayer it’s well worth watching. As the UK gets its emissions under control, aviation is set to account for the largest proportion. Aviation is expected to quadruple worldwide and with zero-emission planes away over the distant horizon, emissions will grow as well. What will they do?
Where there’s muck there’s fuel
A spokesman from Velocys explained how they were making aviation fuel from household rubbish, and claimed that this was delivering an aviation industry with net zero carbon emissions, although a professor from Manchester Metropolitan University suggested that the industry would not have the capacity to displace fossil-fuel kerosene for decades. And how does this new fuel achieve carbon neutrality? I think it must take into account the fact that rotting household rubbish generates methane, a GHG many times more potent than CO2. The new fuel burns with exactly the same emissions as conventional fuel, but if the methane has been eliminated in the process then net emissions are reduced. There will still be emissions. There will still be a net addition to atmospheric GHG. It’s not carbon neutral. To me it sounds a bit like the logic which says that Drax power station is now one of the cleanest sites in the country, even as they desperately try to get Carbon Capture and Storage to work.
If you fly RyanAir you are given the opportunity to donate £1 or €1 towards protecting the environment. The company invests in a project to monitor whales, a project to provide clean cooking stoves to villagers in Uganda and is growing forests in Portugal and Ireland. All these are good things, but only the forests are true offsets and the people at the BBC calculated that Ryanair’s forests would absorb only 0.01% of its emissions. Apparently, to absorb it all would take an area of forest equivalent to 12% of the UK.
In a Word
A remark from a representative of IATA , the International Air Transport Association, summed it up for me. He said, “Flying is not the enemy: CO2 is the enemy.” That sounds to me a bit like the mantra of the US National Rifle Association: “Guns don’t kill people: people kill people.”
The major problem with any offset scheme is that it gives people a false sense of security. It is tempting to believe that as long as you buy enough offsets you can go on flying, driving, turning up the gas central heating and lounging under your patio heater as much as you like.
That’s just not true.
What can we do? We can fly less, obviously. Drive less and drive a smaller car if you can. Insulate your home and/or keep it at a lower temperature. Eat less meat. Reduce, re-use and recycle. Governments have an essential role. If there’s no public transport people have to drive. Governments could subsidise home insulation. It will keep people warm for a lower cost and reduce our dependence on energy, including imported coal and gas. It would also create jobs and deliver tax revenues.
I wrote a book many years ago with the subtitle “How to drive a 4x4 and still save the planet.”
“How do you do that?” people asked me.
You drive it very, very slowly or not at all.
And in other News…
The major news has got to be the wildfires in Australia. The fire season has come early, the fires are covering a wider area and are more intense and some say it will be months before they are all dealt with. Meanwhile it is still Spring in Australia: the hotter summer months are still to come.
Inevitably the question, “Is climate change to blame?” Has been raised. Prime Minister Scott Morrison came to power in the surprise result to an election earlier this year, defeating his opponent who was urging the nation to do more about climate change. When asked about it this week Morrison sidestepped the question while when asked the same question, New South Wales Premier Gladys Berejiklian told reporters: "Honestly, not today.” Deputy Prime Minister Michael McCormack dismissed climate change as the concerns of "raving inner-city lefties" who were ignoring the needs of rural Australians.
Not a really useful debate.
Of course the Australian economy is heavily dependent on fossil fuels. It’s the largest exporter in the world of coal, accounting for nearly 40% of global coal exports. Floating 125 miles offshore is Shell’s Prelude, the largest ship in the world, which contains a complete gas processing plant. It’s anchored above the gas well and can process and offload product directly into tankers. There’s no need to ship the gas ashore for processing and no need for harbour facilities to load the tankers. It can process 5.3 million tonnes of liquefied products per annum, but at a reputed cost of some $12bn they will want to keep it operating for many years to recover the investment.
There’s immense money in oil. Oil shares are the bedrock of many a pension scheme, giving reliable returns, year after year. The global economy is founded on oil and even though we are poisoning the planet with GHG emissions we can’t stop using oil overnight. In fact transitioning away from it in 20 years would be difficult and in 10 years near impossible. Imagine the social breakdown if transport just stopped. No way to get to work, no deliveries of food to the shops, no ambulances and no supplies to hospitals, and all the other things that wouldn’t happen. We do need to make a start on this transition, though.
Meanwhile Saudi oil company Aramco is offering investors a share in the company. Aramco is reportedly selling between 1 and 5 percent of its equity with a target valuation of the whole company of between $1.3 trillion and $2 trillion. This makes it the largest offering of its kind, ever. Aramco is the world’s most efficient and most profitable oil producer. Who wouldn’t invest? Well I know a lot of ethical investors wouldn’t. In fact in a letter sent last month to bank chief executives, including the bosses of HSBC and Goldman Sachs, 10 environmental groups warned that the listing would hinder the battle against greenhouse gas emissions and human rights abuses.
The environmental non-governmental organisations, including Friends of the Earth US, and Oil Change International, warned that the listing would lead to “the biggest single infusion of capital into the fossil fuel industry” since the Paris climate accord in 2015.
The letter also raised concern over the banks’ eagerness to help raise billions of dollars for Saudi Arabia, “given the horrendous human rights record of the Saudi regime”.
And in Iran
Oil is money and oil is power. This week President Hassan Rouhani of Iran announced that the country had discovered a new oilfield containing 53 billion barrels. This increases its reserves - already large - by about 30%. The president said this would strengthen the country’s position in the face of ongoing American sanctions.
With such high stakes it’s little wonder that climate deniers are continually pushing their agenda and opposing regulation. One of the world’s leading climate experts, Michael Mann, director of the Earth System Science Center at Pennsylvania State University, complains that there is a move to confuse and to deflect people from what’s important. Yes, it’s a good thing to change diets and travel choices and to turn down the heating at home but that does not remove the need for action by governments and radical policy changes.
It’s 10 years since thousands of emails were hacked from the University of East Anglia’s Climate Research Unit and made public. They were selectively misinterpreted and used to claim that scientists were falsifying the figures and that climate change, if not a hoax, was vastly exaggerated. This all came out just before the Copenhagen Climate Conference (COP15), long considered one of the least successful. Whether the conference was actually damaged by the campaign is still in dispute, but this won’t have upset the deniers. It is a constant battle to counteract those who want to rubbish and confuse climate science, not helped by the fact that nothing in science, as in life, is ever 100% certain.
Apparently there is nothing certain about fracking. We did hear last week that the government had introduced a moratorium on fracking in England, bringing it in line with Scotland, Wales and Northern Ireland, amongst other countries. On 4 November, the Ministry of Housing, Communities and Local Government (MHCLG) published a response to a consultation on shale gas exploration which appears to contradict the new policy. It warns firms that the Government is generally opposed to fracking but does not rule out accepting new applications.
The government’s response to the findings of the consultation document says: "It should be noted that the Government has made clear that on the basis of the current scientific evidence, and in the absence of compelling new evidence, it has taken a presumption against issuing any further Hydraulic Fracturing Consents. While future applications will be considered on their own merits by the Secretary of State in accordance with the law, the shale gas industry should take the Government’s position into account when considering new developments.”
Plus ça change, as I’m told the French say, plus c’est la meme chose. Although we probably won’t be allowed to say that after Brexit.
Before I go…
Good news from Turkey. This week the citizens got together and planted 11m trees in one day. By planting 4.5B saplings over last 17 years, said President Erdogan, the breadth of Turkey’s forest has expanded to 22.6M hectares.
That should lock up quite a lot of carbon.
Have you seen the Sainsbury’s Christmas Commercial? No, I didn’t mean to either, but these things can be hard to avoid at this time of year. I noticed that the horse-drawn delivery van was emblazoned on all sides with the legend “Zero Emissions”. I wonder what they fed the horse on to achieve that.
And with that thought I leave you. I'm Anthony Day and that was the Sustainable Futures Report.
I’m sure there will be another one next week. If you’ve any ideas as to what it should be about please get in touch via email@example.com
Thanks for listening, thanks for being a patron and thanks in particular to James Spencer for supporting the research behind this episode.
Until next time.
Offsets and Warming
'Greta Thunberg effect' driving growth in carbon offsetting
Shell Natural Gas
Bidding for 'milestone' sale of Aramco shares set for next week
New oil in Iran
Climate change deniers’ new battle front attacked
Climategate 10 years on: what lessons have we learned?
Turkey plants trees
Sainsbury’s Christmas Commercial