Carbon Offsetting: the Good, the Bad and the Ugly

by Louisa Burwood-Taylor (Ag Funder News) For a while now, people have been questioning the value of carbon credits generated by the forestry and agriculture sectors.

Many commentators including myself have likened carbon farming initiatives to the Wild West of the agriculture sector as the science behind the measurement of soil carbon at any scale is still fairly basic and unreliable. Lagging regulation is another potential risk for innovators in the space as are the varying standards used by the few high-profile certifiers responsible for issuing the majority of carbon credits to corporations trying to meet their net-zero targets. This didn’t stop agrifoodtech investors from putting carbon-related startups at the top of their investment wishlist for 2023, as featured in the AgFunder global agrifoodtech investment report.

But the cracks are now starting to show and earlier this year an investigation by The Guardian revealed that over $1 billion of carbon credits certified by leading platform Verra could be worthless. Verra approves three-quarters of all voluntary carbon offsets but according to the investigation, 94% of Verra-certified carbon credits had no benefit to the climate with little evidence of deforestation reduction. Furthermore, The Guardian argues that the threats to the forests were overstated. While the Integrity Council for the Voluntary Carbon Market, an independent governance body, has since released a new set of rules aimed at boosting the “integrity” of the global carbon market, commentators are arguing that 2023 is a “make or break year” for carbon markets.

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Antony Yousefian, VP of Climate & Circularity at Wiliot, an ambient sensing and IoT company that’s started tracking the carbon footprint of food through the supply chain, argued that certifications need to be done by consensus involving multiple entities and people to avoid poor quality credits; currently certifying bodies are almost incentivized to issue credits. He highlighted the Open Forest Protocol as an example of a consensus-based model.

Jerome Cochet, cofounder of GoodCarbon, a marketplace matchmaking buyers and sellers of carbon credits focused mostly in forestry but also in agriculture ....

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Also on the panel was Robert Gerlach, founder of Klim, a German startup helping farmers transition to regenerative agriculture, a system of farming that can help them to store carbon in their soils and thereby potentially sell offsets.

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In the context of generating soil carbon through farming, Gerlach’s main argument was that while the measurement part is certainly imperfect, albeit improving all the time, the industry needed to start somewhere, urgently.

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Yousefian had a mike drop moment when asked by an audience member about the differing quality of carbon credits, arguing that carbon credits should not even be a commodity and instead, we should be paying farmers an asset management fee to look after their stored carbon. READ MORE WATCH Recorded Presentation

Scaling agricultural soil carbon for communities and climate (part 1) -- Exploring the legacy of injustice in US agriculture — and key considerations for future soil carbon policy (Carbon 180)

A Major Showdown Is Brewing Over What Counts as a Carbon Credit (Bloomberg)

Singapore’s Climate Impact X launches global carbon spot trading exchange (The Straits Times)

Excerpt from Bloomberg: A few sentences in a note from an obscure United Nations group has ignited a firestorm in the carbon removal world. At issue is a beguilingly simple question: What counts as a carbon offset?

The document — a draft to define a new global carbon market, released last month — elevated nature-based solutions like planting trees while downplaying the role of carbon dioxide removal (CDR) using machines or other forms of technology. Both natural and technological approaches can be effective ways to stave off the most catastrophic impacts of global warming. The demarcation might not sound like a big deal, but to the carbon removal industry, it’s existential. READ MORE

Excerpt from Inside Climate News: But a systematic evaluation of 26 carbon offset projects that claim to slow the rate of potential deforestation in six countries on three continents, found that the vast majority of projects did not actually slow deforestation, and those that did were significantly less effective than they claimed.

The study focuses on voluntary REDD+, or Reducing Emissions from Deforestation and forest Degradation projects. These are standalone projects that operate independently in the voluntary carbon offset market, outside of the United Nations Framework Convention on Climate Change’s REDD+ framework for national and subnational projects. The authors call for “urgent revisions” to the certification methods used to attribute avoided deforestation to these projects, pointing out major flaws in current practice.

Over the past few decades, carbon offsets have become increasingly ubiquitous, particularly in higher-income countries, where consumers can assuage their climate guilt by paying a little extra for a flight ticket or a rental car, with the understanding that their additional payment will go towards supporting a tree farm, for example. Big, high-emitting companies like Delta, JetBlue, Disney, General Motors and Shell have all bought and sold huge amounts of carbon offsets in the name of climate action. It’s an attractive business model for companies looking to “go green” without significant changes in their operations: purchase some carbon offsets to cancel out your emissions. Or, at least, appear to.

Ever since carbon offsets hit the market, there’s been significant debate over whether or not they’re an effective model for climate mitigation. The Cambridge study illustrates a basic problem: many carbon offsets aimed at reducing deforestation are not nearly as effective as they claim to be. And in a lot of cases, they may not be doing anything at all.

Julia Jones, a Ph.D. conservation scientist at Bangor University focused on conservation impact evaluation, said the study’s unique methods make it especially compelling and set it apart from other research in the field.

“Their study is definitely the largest in scope and using pretty much the most robust methods at the moment,” said Jones, who was not involved in the study.

Most projects look at historical deforestation within a region to forecast a baseline deforestation rate, or the amount of deforestation that would have happened without the project’s intervention, West said. The problem is, it’s all based on hypotheticals. READ MORE