Carbon Neutrality and Offsetting
Carbon Neutrality
The concept of ‘carbon neutrality’ is becoming an increasingly popular way for organisations and individuals to demonstrate their concern over climate change. However, the term has been used to describe a variety of different policies, ranging from operational activities (e.g. running a Government department) to the planning of a new housing growth area.
The SDC has engaged with stakeholders on the issue of carbon neutrality and carbon offsetting, and this has helped us to arrive at a definition which we hope will be refined over time.
The SDC defines carbon neutrality as any product, activity or organisation that causes no net increase in CO2 emissions to the atmosphere under ‘business-as-usual’ conditions. Hence, carbon neutrality allows emissions to be netted off in some other location, a process which is usually called ‘carbon offsetting’.
However, we believe that carbon neutrality should be seen as a process that aims to progressively reduce emissions, rather than just a route to carbon offsetting. For organisations, it should therefore lead to the adoption of a comprehensive carbon management strategy, which attempts to quantify and reduce the lifecycle carbon emissions of the operation, service or facility in question.
Lifecycle emissions may be defined as the sum of direct and indirect emissions, and would therefore require engagement both up and down the supply chain to ensure maximum impact.
Further guidance on carbon neutrality and the importance of good carbon management is available from the Carbon Trust.
Carbon Offsetting
The use of carbon offsetting is gaining momentum. A useful definition of carbon offsets has been developed by the Carbon Trust:
"Carbon offsets are generated from projects that avoid or absorb/sequester carbon dioxide, or any of the other main greenhouse gases. These projects can take various forms, including renewable power, energy efficiency, fuel switching (e.g. from oil to natural gas), reforestation, or destruction of greenhouse gases (e.g. methane, HFC 23)." |
Carbon offsets (sometimes called ‘carbon credits’) are available from two quite separate sources: the compliance market, which is a product of the legal instruments created to support the UNFCCC and the Kyoto Protocol, and the voluntary market, which has developed in response to consumer and business demand for carbon offsetting services.
However, it is not currently possible to do carbon offsetting in the UK, as this would lead to the double-counting of any reduction in emissions (as all reductions are already claimed by Government in helping to meet our international obligations). For organisations that want to keep funds within their organisation or community, the SDC recommends they look at alternative mechanisms, such as investment in ‘revolving funds’ (for example, the public sector revolving fund managed by Salix Finance).
It is important to note that carbon offset projects would not be necessary if there was an universal cap on international greenhouse gas emissions. However, in the absence of a viable international framework covering all countries or sectors, there is a potential role for carbon offsetting in helping to stimulate additional low carbon investment in developing countries whilst providing low cost emissions reductions for the offset purchaser. As stated above, carbon offsetting should be done as part of a comprehensive carbon management strategy.
For these reasons, the SDC cautiously supports the use of carbon offsetting in the absence of a global cap on emissions. There are a number of sustainable development benefits that offsetting can deliver to less developed countries, such as the provision of new sources of energy and a reduction of local air pollution. This was the logic behind the establishment of the Clean Development Mechanism (CDM) as part of the Kyoto Protocol.
Furthermore, carbon offsetting may raise carbon awareness (or ‘carbon literacy’) among individuals and businesses, helping to put a cost (albeit a small one) on carbon-emitting activities. The SDC’s work in this area, through the Sustainable Consumption Roundtable (in conjunction with the National Consumer Council), suggests that actions such as carbon offsetting could act as a ‘practical catalyst’, helping to drive other actions towards more sustainable behaviour.
It is also important that carbon offsets deliver verifiable reductions in greenhouse gas emissions in a way that is consistent with the principles of sustainable development. This means that organisations and individuals need to exercise caution when purchasing carbon offsets to ensure they are of a sufficiently high standard. Initiatives such as the Gold Standard for CDM and voluntary market carbon offsets (see link below) are particularly welcome, and an increasing number of carbon offset providers are offering credits that are independently certified.
Publications
• SDC submission to Defra consultation on developing a Code of Best Practice for carbon offset providers
• SDC Scotland workshop on carbon neutrality and offsetting
• UKERC-SDC workshop on carbon neutrality and offsetting
Further information
• Carbon Trust guide to developing a robust offsetting strategy
• Defra offsetting policy
• Forestry Commission guidance on forestry-based offsetting
• Gold Standard CDM
• House of Commons Environmental Audit Committee report on carbon offsetting
• REEEP article on high sustainability standards in carbon offsetting
• The Climate Group top 10 tips for purchasing carbon offsets
• UNFCCC page on the Clean Development Mechanism (CDM)
