No Problem! Our Compay Will Offset Our Emissions W. A Forest That . . . Oops! It Just Burned Down!
For the lobby group Global Witness, it is a “corporate offsetting fallacy”. For companies watching wildfires rage across California, it is seeing your “net zero” ambitions go up in smoke. It is the business of buying “offsets” to help your company tell the world it is on track to reach “net zero” carbon emissions by 2050. I must confess to a long-standing bias against carbon trading. Since the 1997 Kyoto protocol first provided regulations for carbon trading and offsetting, I have harboured deep scepticism about their value. Too many of the punters engaged in the development of now-huge global carbon markets were primarily driven by the exciting prospect of a lucrative financial product.
Whether carbon trading and offsetting meaningfully contributed to achieving “net zero” by 2050 seemed incidental, as market traders made fortunes creating new financial products that helped global enterprises embrace environmental virtue. With an estimated 64 carbon pricing markets now active globally, and another 30 under development – Hong Kong Exchanges and Clearing has just set up the Hong Kong International Carbon Market Council – there are many happy to use these markets to meet their “net zero” challenges.
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Probably the deepest concern is the impossibility of guaranteeing the permanence of such natural offsetting projects. As California has already suffered more than 4,900 wildfires this year, with the largest of them consuming 22,000 hectares, a number of forest carbon offset projects have literally gone up in smoke. This deals the companies that invested in these offsets a double blow: first, their offset no longer exists, so they are back to square one in terms of reaching “net zero”; second, the fires have created huge volumes of additional carbon dioxide emissions. Reuters reported last month that in 2021, wildfires mainly across Siberia, the US and the Mediterranean accounted for 1.76 billion tonnes of carbon dioxide emissions, and that fires so far this year suggest wildfire emissions will rise even higher.
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Under the California scheme, forestry projects keep carbon credits in reserve in a “buffer” to make sure wildfires cannot compromise the offset market over the coming century, but this reserve has been all but depleted in less than a decade. In marvellously neutral scientific prose, the report said that “forests are subject to significant socioeconomic and physical risks that can cause temporarily stored carbon to be re-released into the atmosphere”. In short, 95 per cent of a century’s worth of “insurance” against wildfire loss has been consumed in less than a decade. It appears that forest offset schemes have so far not only failed to provide a credible corporate route to “net zero”, but, worse, they have also done little to stem the loss of tree cover worldwide. While annual losses have fallen since the peak year of 2016, we have still lost 437 million hectares – about 11 per cent of global tree cover – since 2001, releasing 176 gigatonnes of carbon dioxide into the atmosphere.
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https://www.scmp.com/comment/opinion/article/3188833/raging-wildfires-call-question-carbon-tradings-role-climate-change