Carbon offsets aren’t helping the planet — four ways to fix them
- Media Manager
- Aug 28, 2023
- 2 min read
Nature
Written By: Philip W. Boyd, Lennart Bach, Richard Holden & Christian Turney
Published: August 29th, 2023
Pricing credits according to how much carbon is removed, for how long and how reliably, would direct funding to the most effective climate solutions.
Reaching ‘net zero’ carbon emissions requires doing more than curbing greenhouse-gas emissions. Carbon dioxide must also be withdrawn from the air to compensate for continued releases from sectors in which emissions are hard to abate, such as cement and steel production1,2.
There are many ways to do this — from extracting CO2 directly from the air by chemical means to planting trees and seagrass, or seeding the oceans with iron to stimulate the growth of photosynthesizing phytoplankton. Even with full decarbonization, billions of tonnes of CO2 will need to be locked away each year — a tonnage equivalent to all of the food or concrete produced in the world annually.
Markets in ‘carbon offsets’ — credits that pay someone else to reduce atmospheric carbon on your behalf — can be an effective way to manage CO2 removal globally. But they will work only if the prices and incentives are right, and there are currently two fundamental problems with how they are set up.
First, at least 90% of the offsets traded3 in the voluntary market are not for removing carbon at all, but for avoiding its release. Foresters, for example, are paid to not chop down trees. These offsets do little to lower CO2 levels in the air and should be replaced with those that facilitate proper removal3,4. The amount of carbon offset also needs to grow at least 15-fold from current levels (mainly based on avoidance offsets) to meet a projected demand for carbon-removal offsets of 1.5 billion to 2 billion tonnes of carbon dioxide per year in 20303.
Second, the price put on locking away one tonne of carbon is meaningless. Every approach to carbon removal differs in its stage of maturity1,2, in how much it can be scaled up, in how effectively it removes CO2 and for how long, and in the costs involved. Different approaches are thus hard to compare. Markets don’t know whether the method used is reliable4, and no timescale is attached. Current offsets treat one tonne of carbon removed as one tonne, whether it is sequestered for a few years or for 100.
Prices are similarly vague. Depending on where the purchase is made, the market price can range from under US$10 per tonne for some nature-based offsets to around $100 per tonne in European Union markets, for example. That’s less than the expense of removing one tonne of CO2, which currently exceeds several hundred dollars for any method. Such low market prices are in part a legacy of the current reliance on avoidance credits, which essentially have little or no cost to implement.
