Akihabara News (Tokyo) — Carbon offsetting is hailed by many as a potential answer to much of the world’s greenhouse gas emission concerns, but many believe it is utilized only as a means to not engage in more serious climate action.
Carbon offsetting refers to either a reduction in greenhouse gas emissions, with a particular focus on carbon dioxide, or storing the gas in a way that compensates for such emissions.
The buying and selling of “carbon credits” to fund offset projects make up the carbon offset market, with one credit equaling one ton of carbon dioxide. These credits function as permits and allow companies to emit as much carbon dioxide as the credits are worth and then claim that their operations are “carbon neutral.”
Companies often use these credits, which can be bought and sold, to theoretically cancel out their greenhouse gas emissions and to comply with carbon caps.
China has the largest offsets market in the world and is comprised of over 4.8 billion metric tons of carbon dioxide emissions–an impressive feat considering that the country’s emissions trading system (commonly referred to as ETS) was introduced only a year ago. By comparison, the European Union has the second-largest emissions trading system in the world, launched in 2005, but is less than half that of China’s system.
Last month, Canada launched its own national offsets market.
In addition to funding initiatives such as reforestation programs, carbon offsetting supports additional avenues for investment into renewable energy technologies and infrastructure. Renewable energy is an increasingly common form of carbon offsetting and essentially “cancels out” a proportion of the carbon dioxide emitted by the buyer.
Australian environmental markets investor and developer GreenCollar further describes carbon offsets as “an effective way for businesses to quantify environmental, social and governance (ESG) investments.”
However, the carbon offset market has also been widely criticized and likened to a form of greenwashing.
Earth.org, a think tank headquartered in Hong Kong, warns that investing in carbon offsetting instead of taking steps to reduce in-house emissions undermines a genuine effort to achieve strong decarbonization results.
In fact, the concept of being able to buy and trade carbon credits itself has been called into question. Some–as reported by Means & Matters, an online publication of the sustainable investment-focused Bank of the West–object to the idea that large corporations can essentially “buy their way out.” Wealthy companies are able to avoid taking more direct and immediate actions towards cutting their greenhouse gas emissions while still claiming to be working towards zero net emissions targets and describing themselves as “carbon neutral.”
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