Leaked documents: Nations pushback against offsetting ‘greenwash’ claim

Some of the countries which pushed for the Intergovernmental Panel on Climate Change (IPCC) to weaken its language on a fossil fuel phase-out also challenged the scientific assessments that carbon trading may result in smaller reductions in emissions than claimed. 

Leaked comments on a draft IPCC report have revealed how major fossil fuel producers like Saudi Arabia and Australia have pushed for a more favourable assessment of “carbon capture and storage” – nascent technologies that can capture carbon emissions, allowing industries to continue burning fossil fuels. 

However, these comments also offer an insight into what will be a hotly contested issue in next month’s COP26 climate talks in Glasgow: the role of “carbon offsetting” in allowing companies and countries to reduce their emissions without phasing out fossil fuels.

Carbon offsetting is the process by which companies – or countries – can reduce their claimed emissions e.g. reach “net-zero” by paying another entity to either avoid emissions or take greenhouse gasses out of the atmosphere. 

Each so-called offset, generated by projects such as planting trees, is meant to represent a tonne of carbon that has been permanently avoided or removed from the atmosphere. However, this “additionality” has been hard to prove, and there have been numerous reported flaws with existing systems.

Furthermore, wildfires in California and elsewhere have fuelled doubts over whether carbon credits that depend on offsets can be relied on in the long term. An estimated 153,000 acres of forests that are part of California’s carbon offset project have burned over the summer. 

The UN talks will focus on agreeing to a scientifically robust rule-book for so-called ITMOs – Internationally Transferred Mitigation Outcomes – the mechanisms by which countries and companies can trade in carbon offsets between each other.[DK6] 

The risk is that offsets claim to avoid emissions that would not have happened in the first place, leading in effect to greenwashing and double counting, something noted by the IPCC

But in its submission, Australia challenged the research cited by the  IPCC assertion that “a growing body of research – usually drawn from experience with existing carbon markets and the Kyoto mechanisms – highlights environmental integrity risks associated with using ITMOs under the Paris Agreement given the challenges that the diverse scope, metrics, types and timeframes of NDC targets pose for robust accounting (Schneider and La Hoz Theuer 2019) and the potential for transfers of ‘hot air’ as occurred under the Kyoto Protocol (La Hoz Theuer et al. 2019)..”

The Australian commentator noted: “Query the use of ‘growing’ (line 8) with reference to the body of research, as only 2 studies are referenced. Two studies does not seem a normal scale for a ‘growing body’ of research.”

The studies referenced by the scientists in fact bring together a large body of literature including over 100 articles.

Greg Muttitt, a senior policy advisor at the International Institute for Sustainable Development said there was extensive evidence that carbon offsets – and other such “fixes” -do not work.

“The real solution to climate change is quite simple: rapidly reduce the production and consumption of oil, gas and coal,” he told Unearthed. “But carbon-addicted governments are looking for an excuse not to do that, and instead propose offsets, technofixes and convoluted accounting. Governments need to heed the extensive evidence that such approaches don’t work, rather than trying to bend the science to their political preferences.”

Despite the concerns, multiple oil companies have sought to market and promote so-called “carbon neutral” oil. 

In leaked comments on the IPCC draft, Saudi Arabia argued that tax benefits proposed for clean energy should also apply to oil.

“A barrel of oil that is the result of an extremely energy efficient process, and offset by CCUS or other carbon-neutral accounting efforts, should have the same kind of tax incentive that a low carbon product has,” it said. The Saudi  kingdom’s much-promoted Circular Carbon Economy proposal also includes a significant – though secondary – role for efforts such as tree planting.

In one passage the IPCC noted the potential for some forestry offsets – which generally trade for far less than carbon permits issued by countries – to be used as “cheap greenwashing”. The section prompted multiple countries, including Canada, the US, UK objected to the wording, with Japan noting:

“It would be better to put explanations why the AFOLU [forestry offsets] cannot act as a cheap ‘greenwashing’ opportunity, even though [sic] its mitigation potential and relatively low cost.”

The IPCC report – with its final view on the merits of carbon trading – is not expected till the spring by which time nations are hoping to have finalised the shape and role of the world’s carbon markets in reducing emissions.