What we'll cover in this blog post:
- What is carbon removal offsetting?
- A key difference - offsetting vs emissions reduction
- Net-zero carbon status
- Verifiable, reliable, meaningful
- Diversifying your portfolio
- When markets get complex
- Benefits for planet, people and profit
What is carbon removal offsetting?
In essence, carbon removal offsetting allows companies to invest in environmental projects from around the world focused on carbon removal as a way of offsetting their own carbon emissions. From a technical perspective carbon removal means sequestration of CO2eq (or GHG) from the atmosphere.
The removal could span a few years to 1000s of years, depending on the method. A carbon removal offset credit is measured according to each tonne of CO2eq that is removed. As one would expect, the durability and longevity of the carbon sequestration method drives the value of the credit.
Of course, whilst efforts to reduce carbon emissions should always start with practical reductions in-house, there are practical limits to what a business can achieve simply by the nature of their industry or operation. This is where carbon removal offsetting comes in. A company who is outputting a certain amount of carbon might choose to invest in projects which actively reduce CO2.
These can include projects like planting trees or direct air capture but increasingly more projects include initiatives that support developing countries in improving their environmental practices, such as funding the purchase of clean cooking stoves or changing approaches to agriculture.
A key difference - offsetting vs emissions reduction
Not all carbon offsets are created equal. There are two fundamental types with key differences: Emission reductions, that is, traditional offsets that result in emitted
carbon staying in the system; and carbon removal, where the process actually takes carbon out from the system.
The Intergovernmental Panel on Climate Change (IPCC) has stated that in order to keep global warming below the Paris climate target of less than a 2°C rise in average global temperature, we need strategies that include huge cuts to emissions, as well as permanently removing carbon dioxide from the air. To reach the target, the IPCC has stated that we need to extract some 670 billion tons of carbon dioxide from the atmosphere this century.
The only way to achieve that is through the process of carbon removal, which comes in many different forms.
There are a number of ways it can be done. One of the most common (and often, most criticised) is that of tree planting. We’ll all largely remember from High School science lessons that trees - rather conveniently - suck in carbon and spit out oxygen. They are nature’s air purifiers, and after decades of deforestation it’s high time we started to reverse that trend. Tree planting offset initiatives are widespread and easy to engage with.
As strategies go, on the face of it, it seems like a good one; it’s natural, low-tech, relatively cheap to implement, and fairly effective. But the method is sometimes criticised because it’s frequently employed by companies as a low-thought, low-commitment environmental effort, deployed to maximise impact in the boardroom, not the atmosphere.
Other measures can range from the equally low-tech, to the seriously high-tech. Agricultural soil management is another low-tech, high impact solution (and one embodied by one of our favourite projects - Biochar Life), but at the higher end of the scale there are practices such as direct air capture, ocean-based carbon removal projects, and mineralisation initiatives.
In many cases, it isn’t simply a case of making a hierarchy and saying ‘this strategy is better than that one’; they’re often highly contextual and their application will depend on a range of factors. But they great thing is that with the use of NFT markets (discussed more below). to track the outputs and success stories of various initiatives, it’s easy than ever for the general population to engage with, understand and monitor the active difference that their contributions and offset practices are making.
Net-carbon neutral status
There was a time when practicing business in pursuance of ethical and environmental standards was a point of differentiation. These days, it’s a necessity. With increasing pressure from international frameworks and targets, governments are placing more robust requirements on businesses to take action and reduce their carbon footprints.
But crucially, carbon removal offsetting is not just for businesses going above their carbon cap. Whilst companies are increasingly required to meet a certain standard of practice, this should be seen as a bare minimum.
There is still a huge amount of room for organisations to go above and beyond in the efforts they make – achieving net-carbon neutral status. And not only is that the right decision to make ethically, it’s a savvy business choice too. Research shows that the environmental credentials of a business have a genuine and meaningful impact on a customer’s decision to purchase, their loyalty, and their likelihood to act as a brand ambassador.
More companies and governments are coming to the realization that they need to achieve carbon negative (not just neutral). The emissions that are generated each year can stay in the atmosphere for decades so companies and governments need to remove more than they emit to make up for past sins.
Verifiable, reliable, meaningful
To that point, one of the elements that has plagued the carbon removal and offset movement thus far is one of administration. How can a carbon credit be defined and measured? Moreover, how can it be proven to have been produced (after all, how do you prove an invisible negative!?).
The answer is through tracking the process that projects use – setting out clear boundaries, developing a system of documentation, and then tracking progress. Most crucially, what is needed is a verification plan to show that what is being declared is what is being done. And that’s where NFTs are making a big difference (if you’re not up-to-speed with what NFTs are and the benefits they can bring, check out our handy guide here)
Both fungible and non-fungible assets (NFTs) lie at the core of the work we are doing at Task.io, and via our NFT marketplace thebluemarble.io, as we partner with Biochar Life to help reduce smoke pollution and emissions whilst also improving the livelihoods of the local farming communities.
Diversifying your portfolio
Because the carbon credits produced by environmental projects – such as the Biochar Life – can be traded as NFTs, then they necessarily represent a marketplace. And just like a traditional marketplace, many of the same trading concepts apply.
This means that when companies are aiming to reduce their environmental footprint through offsetting, they may not limit themselves to just one solution. Instead they might seek to build a diverse portfolio of carbon credits to meet their ethical, environmental, financial and strategic goals. The portfolio might be built on projects which resonate personally with the goals of founders and staff members, or which resonate with potential customers and target markets.
For instance, Microsoft maintains a portfolio of over 26 projects, helping them to remove 1.3 million metric tonnes of carbon from the environment.
When markets get complex
Of course, just as with traditional financial markets, things start to get a little more complex than just simple transactions between those providing offsetting/carbon removal initiatives, and those looking to mitigate their own carbon footprint. Develop a market between product and purchaser, and it won’t be long until there are intermediaries, traders, resellers and any other number of complex elements.
And of course it makes sense - carbon removal credits are abstract assets with finite supply (or at least, a cost to produce that may limit production), and a growing demand. Their tradability is inherent. And the potential for profit naturally follows.
How should we feel about the development of carbon markets? There may seem to be something instinctively wrong with commodifying a structure which exists specifically for the purpose of serving the environment and trying to undo some of the impacts that have arisen from a heavily commodified, commercialised and capitalist world.
It can be hard to say what’s ‘right’. There are ways in which markets are beneficial. In an ideal world, everybody would be motivated to engage with carbon removal and offsetting because of a fundamental belief in the importance of ethical and environmental responsibility. But the truth is, many different motivations - including reputational and economic gain - can still contribute to improved practical outcomes, higher awareness, and greater engagement.
Does that matter if the end goal is ultimately achieved?
There will be differing opinions on that point, however it's probably not the important part to be focusing on. What does have more merit is the integrated social impact of projects working with rural farming communities. Sure, the carbon removal is critical and provides the funding needed for the social enterprises working to scale these programs. But the outcomes are far more impactful than just the carbon removal results.Most notably hundreds of thousands of lives can be saved by stopping the burning. Agricultural burning is a huge contributor to air pollution which is estimated to kill 7 million people a year including 650,000 children.
So our main aim is to keep it simple - to help individuals and organisations make informed choices that allow them to engage with positive environmental practices by investing in offsets that have a positive impact on people's lives today, whilst also removing CO2 from the atmosphere and therefore positively impacting future generations.
Benefits for planet, people and profit
Whilst there aren’t many good things that can be said about greenhouse emissions, there is one: they’re global. Which means that we’re all responsible, and we all have a role to play.
Most significantly though, it means that reductions in one part of the planet can aid places in other parts of the planet. From a global economic point of view it can make a lot of sense to outsource the reduction of carbon; just as there are locations where it might be more cost-effective to manufacture products, so too are there areas where it is easier and cheaper to reduce CO2 outputs.
Indeed, these areas are often the ones where to do so would be the most beneficial. They represent societies at the earlier stages of their development journey, and by intervening in carbon emissions output at an early stage, then efficient and effective environmental practices can be built in from the ground up, rather than making costly alterations and adaptations later.
The net result of carbon removal offsetting is that investment is diverted to communities that need it – enhancing their operations in ways that often go far beyond merely reducing their carbon-creating activities.
Globally, there are more than one billion small hold farmers, and through the use of mobile technology and Blockchain, carbon removal offsetting has the ability to make a change for every one of them; providing funding at ground level, supporting holistically sustainable practices, creating jobs and educating communities, and saving lives through the reduction of air pollution.
To take a practical example, one only needs to look at the annual smog of Chiangmai, Thailand– a result of traditional slash and burn agriculture approaches, to see how carbon output is both a global problem, but also one with very immediate local consequences. As such, initiatives such as creating biochar have real and meaningful direct benefit for local communities, whilst also proving a cost-effective solution to other businesses, and benefitting the planet on a global level.
Are you interested investing in offsets that have real impact both at a social and environmental level? Get in touch so we can discuss your requirements.
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