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General Carbon Offset projects

Pros:

• In cases where emissions are inevitable, offsets provide a way to try to remediate the effects.
• In many cases, offsets are a catalyst for change in the developing world, where renewable energy projects funded by the developed world could be the basis for sustainable growth.
• Offsets are a source of investment for renewable energy and other projects to mitigate climate change, therefore filling the void that some governments have left by not stepping in to regulate and/or limit the production of carbon dioxide emissions.

Cons:

• Buying offsets makes people feel that it's okay to pollute if they simply compensate for their actions by buying credits.
• Offsetting accounts for a fraction of all emissions produced. Long term we need to radically cut our emissions rather than mitigate them.
• Lack of Fairness - Critics have also raised concerns over equality and fairness based on the argument that carbon offsetting enables developed nations to perpetuate unsustainable lifestyles by funding carbon projects in developing countries.
• Non-additional - Recent research reports have pointed out that a significant number of offsets come from projects that would have been implemented anyway
• The industry is almost completely unregulated and therefore largely held unaccountable for the emissions promises it makes. This causes problems such as:
  • A shortage of verification, making it difficult for buyers to assess the true value of carbon credits
  • Industrial companies profiting from doing very little - or from gaining carbon credits on the basis of efficiency gains from which they have already benefited substantially.
  • Widespread instances of people and organizations buying worthless credits that do not yield any reductions in carbon emissions.
  • Brokers providing services of questionable or no value.

Tree planting projects

Tree-planting (reforestation) projects are notoriously controversial for a number of reasons:

Pros:

• Equality - It is argued that forestry and land use projects provide the only means for the very poor, particularly in Africa, to access the carbon markets.
• Co-benefits - forestry projects can also have additional socio-economic and environmental benefits such as biodiversity conservation and improvements in the quality of life for a local population. For example, it might provide employment to local people and it could bring in extra revenue from environmental tourism that will help to lift people out of poverty.
• Root-cause solution - 20-25 per cent of anthropogenic emissions released into the atmosphere are caused by land use change and therefore climate change mitigation must address land use and deforestation.
• Carbon sequestration through revegetation could provide the renewable biomass materials and fuels needed for the future.
• In addition to carbon sequestration, forests can also cool the planet by evaporating water to the atmosphere and increasing cloudiness; a deck of white clouds reflects incoming solar radiation straight back out into space

Cons:

• Timing: Project developers and offset retailers typically pay for the project and sell the promised reductions up-front, a practice known as "forward selling". A problem with this however is that trees take decades to grow, and as such it will take a long time in the future before they make any impact on the problems we are causing today.
• Permanence: Although a growing forest does help to sequester carbon dioxide from the atmosphere, the permanence of forests can never be guaranteed due to the risk of disease, burning, logging or mismanagement. Planting trees is therefore at best a temporary solution.
• Methodological challenges: there is much scientific uncertainty around the precise quantification of carbon sequestered in trees and soils. For example, recent studies have suggested that there is more carbon stored in the soil of many forest types than in the above-ground biomass and this soil carbon can be disturbed and released by harvesting and reforestation activities. Without an accurate understanding of the carbon inventory, it is difficult to quantify what the net carbon benefit of planting a tree is.
• Monocultures and invasive species: In an effort to cut costs, some tree-planting projects introduce fast-growing invasive species that end up damaging native forests and reducing biodiversity. In addition, old growth forests are often replaced by tree farm plantations that are heavily managed with chemicals and fossil fuel-intensive machinery. Some certification standards, such as the Climate Community and Biodiversity Standard have been put in place to ensure that multiple species are planted.
• Not a root-cause solution - Forestry projects do not contribute to reducing society's dependence on fossil fuels, rather they attempt to sequester carbon that has already been produced. Responding to climate change means fundamentally changing the way we produce and use energy.
• Forests as a source of carbon emissions - Recent evidence suggests that global warming itself is stressing ecosystems and turning forests and forest soils into failing forests and, in the long run, into net sources of CO2. Thus, if we don't reduce our dependence on fossil fuels, planting forests to sequester CO2 will be useless as they will be overcome and die as the climate continues to warm.
• Indigenous land rights issues: Tree-planting projects can cause conflicts with indigenous people who are displaced or otherwise find their use of forest resources curtailed.
• Methane: A recent study has claimed that plants are a significant source of methane, a potent greenhouse gas, which raises the possibility that trees and other terrestrial plants may be significant contributors to climate change. However, this claim has been disputed recently by findings in other studies.
• The albedo effect: previous studies have suggested that trees outside the tropics do little to mitigate climate change. This is because forests absorb sunlight which creates a warming effect that balances out their absorption of carbon dioxide.
• Necessity: Corporate tree-planting is not a new idea; farming operations have been used by companies making paper from trees for a long time. If farmed trees are replanted, and the products made from them are placed into landfills rather than recycled, a very safe, efficient, economical and time-proven method of geological sequestration of greenhouse carbon is the result of the paper product use cycle.
• Lack of space - There is simply not enough space to plant sufficient numbers of trees to deal with carbon dioxide emissions which are expected to increase over the next half century. This will be made worse in the future due to the growing population and subsequent increased demand for food production and agricultural land. For example, it has been estimated that to soak up just the United Kingdom's annual greenhouse gas emissions, one would need to plant a new forest the size of Devon and Cornwall every year.
• Lack of additionality (i.e. above and beyond business as usual) - many forestry offsets are from tree plantings that would, or should, have replaced logged forests anyway. It is therefore difficult to claim that such plantings can be used to offset emissions produced elsewhere.

Renewable energy

Pros:

• Purchasing green energy can encourage investment in new renewable energy sources such as wind, solar and biomass. As such the use of renewable energy can play an important part in a carbon management strategy.
• Avoided emissions due to renewable energy projects are, in essence, permanent, because they prevent carbon from entering the carbon cycle in the first place. Keeping the carbon sequestered in the ground in the form of coal, oil or gas is a much better solution than burning it and then later trying to sequester it with trees.
• Moving away from fossil fuel based electricity production to renewables is important for the long-term protection of the global climate.
• Although many renewable energy projects have high up-front capital costs, they may offer high rates of return, and their operating costs are often minimal once built.

Cons:

• Problems with additionality - there are questions over whether renewable energy offset products from some locations meet additionality tests because of existing regulatory schemes and financial incentives to build them.
• Negative impacts from offset projects - Although many carbon offset projects are associated with environmental co-benefits, some are accused of having negative secondary effects. Point Carbon has reported on an inconsistent approach with regards to some hydro-electric projects as carbon offsets; some countries in the EU are not allowing large projects into the EU ETS, because of their environmental impacts, even though they have been individually approved by the UNFCCC and World Commission on Dams.
• Large areas of land are required for wind farms, biofuel crops, photovoltaic solar cells and risks of industrialising the countryside.
• Biofuels create concerns regarding loss of natural lands which could be ploughed up for planting biofuels, and the impact that using foodcrops for fuel could have on food prices.

Energy efficiency projects

Pros:

• Co-benefits - These projects can also have co-benefits of education and long-term behaviour change. For example some possible co-benefits from a project which replaces wood burning stoves with ovens which use a less carbon-intensive fuel include:
  • Lower non greenhouse gas pollution, which improves health in the home.
  • Improved safety for women who used to go alone into the forest to collect firewood, and were thus exposed to the danger of violence.
  • Better education for children who no longer need to spend so much time collecting fire wood.
  • Better preservation of forests, which are an important habitat for wildlife.
• Reduced emissions due to energy efficiency projects permanent because they prevent carbon from entering the carbon cycle in the first place
• Such projects are often quite cost effective because they save money over the long term through avoided fuel costs

Cons:

• Establishing a baseline, monitoring, and evaluating energy efficiency projects can be challenging and labour-intensive. Consequently, such projects often have higher transition costs than large centralized offset projects.
• It can be difficult to prove that such projects are additional given that they have a payback and are therefore considered economically rational.
• Energy efficiency projects lead to so-called "indirect emissions reductions". In other words, emissions are not reduced at the house where the compact fluorescent bulbs are installed, but in the power plant which has to produce less power because of reduced demand. Who then owns this emissions reduction? Is it the power plant or the person who installed the bulb? Because it is difficult to establish ownership of these emissions reductions and because it is therefore easy to double count these, some programs do not allow for demand-side-management projects as offset projects.

Industrial gas

Pros:

• Can be cheap compared to other offset products.
• As some industrial gases have very high Global Warming Potentials (GWP), the destruction of these gases is a very effective way to reduce greenhouse gases.

Cons:

• Although they are the cheapest to conduct and generate large numbers of offsets, they do not contribute to the development of a low-carbon economy and deliver few additional environmental and social benefits. Furthermore, these projects are high-tech end-of-the-pipe applications with limited employment and local environmental benefits.
• These are presently less common in the Australian market than other types of offset products described above.
• May result in a perverse incentive for more of the ozone-depleting gas to be created due to the sheer volume of offsets and profits that they generate. The price of offsets from these projects is also so low due to the very high global warming potential of the gas that they tend to flood the market and squeeze out more sustainable offset projects, like solar and wind.
• Some research has shown that establishing an international fund to finance the capture and phasing out of HCFCs (via the World Bank, for example) would be much more cost-effective than reducing these emissions through the offset market

Methane capture

Pros:

• It is usually quite easy to establish additionality for methane projects because there is generally no other source of revenue from the activity aside from the sale of offsets

Cons:

• Methane offset projects could create disincentives to regulate landfills and agricultural emissions (e.g. from manure lagoons). Once methane capture and destruction becomes profitable, there is little incentive for project owners to support legislation that would mandate capture and destruction from all methane sources
• Methane projects are notorious for underperforming. CDM landfill methane projects, for example, realize just 35% of their projected emissions reductions.

Mixed offset products

Pros:

• They are often cheaper than other offset products

Cons:

• It is difficult to ascertain what kinds and where the offsets are being obtained from.