This is the basis of a new movement calling for a market purge of low-quality carbon offsets, to make sure the sector is truly delivering climate action. But what is carbon offsetting, how can you spot good quality carbon credits and why does it matter?
What is a carbon offset and what defines good quality offsets?
First and foremost, companies that want to show leadership in sustainability should always seek to reduce and eliminate CO2 emissions within their business operations before looking at buying high-integrity carbon credits.
For most businesses though, completely cutting their carbon footprint is simply not possible. That’s where carbon offsetting comes in.
Carbon offsets have existed in some form since the Clean Development Mechanism was set out in the Kyoto Protocol, as a way for high carbon dioxide emitting, industrialised nations to finance clean energy technologies and climate programs that compensate for their emissions.
After reducing and mitigating emissions within their supply chains and operations, companies can calculate their annual emissions and purchase carbon credits that finance projects to reduce, sequester and avert the equivalent carbon emissions. These are carbon offset projects.
Today, one carbon credit is equivalent to one ton CO2 captured, avoided or removed from the atmosphere. There are a number of ways to do this. Clean energy, new agriculture techniques, reforestation and forest protection, are all technologies to either remove carbon or prevent it from being emitted.
But not all carbon offsets are equally effective.
It’s important for companies to recognise which carbon credits are generated from high-integrity, good quality verified carbon offsetting programs, to have maximum impact with their offsets.
A key indicator of quality in the global voluntary carbon market is the project certification from a registration body. There are a number of certifying authorities that issue carbon credits to projects. The five market leaders are:
-Verified Carbon Standard (VCS)
-Climate Action Reserve (CAR)
-The American Carbon Registry (ACR)
They each have standards that projects must meet that take into account monitoring and evidence, whether the project is permanent and whether it is a unique project that would not have happened without the funding from carbon credits.
Projects under the Verified Carbon Standard, like Quadriz’ are assessed by a third party auditor. They act as a kind of inspecting body that independently checks out the legitimacy and accuracy of the claims projects make before they can sell carbon credits.
But another key factor that is causing concern in the voluntary carbon market is how old some of these carbon offsets are.
Out with the old, in with the new
Researchers at the University College of London (UCL) recently published a paper , calling for the removal of older offsets from the carbon market. The paper stated that these ‘legacy’ offsets are inefficient and actually undermine climate action.
This is because these projects were the first to become registered, when the market was nascent. Data monitoring and quality controls were not as strong or robust as they are now.
New regulations and standards have been brought in to ensure that new projects are as effective as possible. But the problem is, carbon credits generated by these legacy offsets are still on the market. If a team is only as strong as its weakest member, these older offsets jeopardize the progress of the entire market.
In fact, a 2016 European Commission study found that most renewable energy projects certified by the Clean Development Mechanism (CDM) would be redundant as carbon offsets, because of their additionality. This effectively means that they would have happened regardless of CDM financing because of the growth in demand for renewable energy.
It’s not possible for companies to offset their emissions with carbon credits generated from a project that would have gone ahead with or without the carbon offset finance. That’s because – in this scenario – no additional carbon is removed or prevented from entering the atmosphere.
Take this recent report covering a major corporation’s offsetting claim to compensate its emissions, as an example. The wind farm that produced the clean energy that compensated for their transport emissions from the shipment had been operational since 2011. This means it was essentially receiving carbon revenue as an additional income source, without replacing or reducing any extra carbon from fossil fuels.
Using old, outdated carbon offsets from projects with no additionality is a real threat to the efforts of the voluntary carbon market and projects that rely on carbon financing to support environmental protection, biodiversity and indigenous communities.
So what makes Quadriz carbon offsets different?
Quadriz’ carbon offsets are generated by Nature-based Solutions, such as REDD+, Reducing Emissions from Deforestation and forest Degradation projects. This type of project halts deforestation by putting a price on the carbon stored in the forest. This way the forest becomes more valuable standing than cut down.
Quadriz’ REDD+ Corazón Verde del Chaco is a private REDD+ project which will be nested under Paraguay’s national emissions baseline, in order to avoid double counting. The project has a high level of additionality as without the financing from carbon offsets, the project would not have happened and the forest would have been cut down, with the legal permission to deforest already obtained by the landowner prior to the project.
Moreover, the project is certified and third party verified as per CCBS (Climate, Community and Biodiversity Standards) to ensure the project brings value to and includes the biodiversity and local communities.
Quadriz works exclusively on projects in the Paraguayan region of the Gran Chaco, South America’s second-largest native forest area after the Amazon rainforest. Spread across Paraguay, Brazil, Bolivia and Argentina, The Gran Chaco is hugely important in its biodiversity as well as being one of the world’s major carbon sinks.
But right now the Gran Chaco is under threat.
If this happens, not only will the stored carbon in the forest be released into the atmosphere, but endemic species, many of which are endangered, and indigenous communities that rely on the forest will be at risk of disappearing forever.
Globally, deforestation is responsible for a quarter of all greenhouse gas emissions (GHGs) and in the last 10 years alone 2.5 million hectares of the Paraguayan Chaco were destroyed by deforestation for cattle farming.
Quadriz’ project is the largest of its kind in Paraguay, working to urgently conserve its rapidly disappearing forest carbon sinks. But Quadriz’ carbon offsetting projects don’t just prevent carbon emissions, they provide critical protection for threatened wildlife of the forest.
Large-scale measures to prevent deforestation in critical wildlife habitats and ecological regions like the Gran Chaco are made possible by carbon finance. Without the financial incentive to protect this forest, it will most certainly be degraded or deforested.
That’s why Quadriz is working to scale its efforts in the Paraguayan Chaco with these new and innovative carbon offsets. By choosing to offset emissions with Quadriz, companies deliver tangible local ecological and environmental benefits and maximum contribution to the UN Sustainable Development Goals, with global impact that signals the importance and urgency of combatting deforestation in the region.