Carbon offsets are critical for achieving carbon-negativity or neutrality status where we are unable to lower your footprint. However, not all credits are the same, and navigating the purchase of offsets is a nuanced enterprise.
The carbon offset industry is fraught with greenwashing, misleading claims, and a lack of standardization. Offsets performed through CIRCA are highly vetted to ensure efficacy and ethical practices. Below outlines some of the factors & considerations in our assessment of offsets.
Are we actually offsetting 'carbon emissions'?
No. The term "Carbon Offset" is vernacular that is used to communicate the general concept, however it is not indicative of the actual effect of individual projects. Carbon is not a GhG, the term "Carbon Offset" actually refers to Carbon Dioxide (CO2).
This vagueness within the language allows for some ambiguity with project developers on what effect their offset project encompasses- many projects offset just CO2. There are, however, several other GhGs such as methane that contribute to climate change. They are often overlooked because they exist in much lower quantities within the atmosphere, despite many being much more potent than CO2 in terms of warming potential.
There is a metric that accounts for all GhGs, not just CO2, which is called "CO2 equivalents" or "CO2e"; this is calculated by equivalating them with the warming potential of CO2 over a 100-year period. In short, CO2e accounts for all GhGs, of which CO2 is just one.
CIRCA only works with emissions offset partners that account for CO2e, as it is a more holistic approach to using offsets as a way of combatting climate change. Projects that only consider CO2 as an emissions factor are narrow-mindedly taking advantage of consumer perceptions to sell offsets that may have an unkown effect on the climate.
What are the problems in the carbon offset market?
The carbon credit market has fundamental challenges, which are generated by projects that have questionable additionality factors, intentions, and investments with misaligned incentive structures.
After a project is designed, it is usually funded up-front by investment fund, such as a shared-risk management fund. These funds usually require that the project be vetted by one of the main industry verification bodies like Gold Standard- a process that diverts thousands of investment dollars away from the project itself. Gold Standard then declares how many credits can be issued from the project, and then promptly charges a premium on each one, as they issue them to the investment fund.
Following this process, the investment fund sells the credit to a carbon offset broker, changing hands a variable number of times, and being marked up each step of the way. It is important to bear in mind that when an organization charges a premium on carbon offsets, they are incentivised for their customers to emit more. The carbon market has thus grown to encourage emissions behavior, as the industry pays itself to generate carbon credits. By the time the consumer purchases the offset, the project has usually already been funded, or even completed, for years, and the purchase of the credit actually pays layers of intermediaries.
There are many challenges in sourcing an effective offset project; different nations in different parts of the world have characteristics that make them advantageous to host offset projects. Many offset projects target parts of the world that are subject for development, and which have historically challenged relationships with the West (in this context, North America & Europe), which hosts a greater emissions burden. It is important to consider the implications involved with entering less developed nations, interjecting development with artificially created value (the carbon credit), then immediately capturing it and using it to dismiss Western emissions burdens. The necessity and ethical consequences of offset projects in certain parts of the world are deserving of scrutiny.
What does CIRCA do to circumvent these challenges?
CIRCA's offset partners are highly vetted, and we maintain relationships with the original project creators to ensure quality.
Because our projects are independently vetted, we avoid their extreme costs and conflicted incentive structures involved with the verification agencies. The investment is provided directly to the project, eliminating the intermediaries and problematic incentives. This ensures the highest efficacy for each offset dollar that is invested. Additionality is ensured by engaging directly with project creators, verifying that the sale of credits is a necessary function for the financial legitimacy of the project. CIRCA never places a markup on offsets as a fundamental ethical practice.
Furthermore, our emissions offsets are conducted exclusively in the North America, to compensate for domestically generated emissions; both the burden and the crediting value is captured domestically.