Prepare for the Greenwash

28 February 2007
Article
Catholic doctrine maintains that to avoid time in Purgatory after you die, you need to expiate your sins via a punishment or task that is an external manifestation of your repentance. In the late Middle-Ages, the Church — suffering from a lack of funds — took a market-based approach to the business of sinning, and started to sell the surplus ‘good deeds’ of the clergy as indulgences to sinners who had money, but not necessarily the time or inclination to repent for themselves. The Brazilian theologian Dr Odair Pedroso Mateus pointed out in 2001 that indulgences are ‘not about grace and gratefulness but about exchanging goods, about buying and selling, about capitalism.’ Many centuries later, there are new indulgences on the market — carbon offsets. The modern-day Pardoners are companies like Climate Friendly, the CarbonNeutral Company and Elementree. These self-styled ‘eco-capitalists’ are building up what they claim are ‘good climate deeds’ through projects which supposedly reduce or avoid greenhouse gas emissions. The wholesale emissions reductions can then be profitably sold back at retail prices to modern-day sinners who have money, but not necessarily the time or inclination to take responsibility for their emissions. Even offset industry insiders are concerned about the lack of regulation and scrutiny of the new market. Offsets expert Francis Sullivan, who was instrumental in HSBC’s attempt to ‘neutralise’ its emissions, commented that:
There will be individuals and companies out there who think they’re doing the right thing but they’re not. I am sure that people are buying offsets in this unregulated market that are not credible. I am sure there are people buying nothing more than hot air.
A report by Standard Life Investments, Carbon Management & Carbon Neutrality in the FTSE All-Share, tellingly warned that such schemes ‘have the capacity to disguise the failure to achieve actual reductions in overall greenhouse gas emissions.’ Offset schemes are utilised by industries whose profit margins depend on delaying the transition to the low-carbon economy for as long as possible. For petrol companies and airlines, offsets represent an opportunity to ‘greenwash’ their activities. ‘Carbon branding,’ through offset schemes, presents human activity that exacerbates climate change as being effectively ‘neutralised,’ but has no actual impact on the climate. British Airways, which opposes aviation taxes and would never advocate that people simply choose not to fly unnecessarily, can — through Climate Care — present its climate conscious passengers with the option of flying free from concern over the impact of their emissions. This shift to what is essentially an unregulated and disputed form of eco-taxation away from the company and onto the consumer has gained British Airways an enormous amount of favourable publicity. ‘ At a time when some airlines are burying their heads in the sand over global warming, British Airways is tackling the issue full on,’ proclaimed the director of Climate Care. Meanwhile Elliot Morley MP, the UK Minister for Climate Change and Environment, urged all air travellers to consider offsetting their flights. In the time that British Airways has been in partnership with Climate Care, it has also been vigorously promoting the massive expansion of British airports, has launched its own budget airline to short-haul holiday destinations, and has increased its inter-city commuter flight services. British Airways reported a £620m pre-tax profit for the year ending March 2006 — a 20 per cent increase on the previous year — despite the increase in fuel costs during the period. Its short-haul service also moved into profit for the first time in a decade. This was a period of expansion and profitability as much for Climate Care as it was for British Airways. In July 2006, Climate Care’s David Wellington wrote, ‘In the past 10 to 12 months we have seen a 10-fold increase in sales.’ Eighty-five per cent of this growth was in ‘online sales for offsetting flight emissions.’ The ‘science’ involved in monitoring and measuring offsets has been the subject of fierce controversy. The credits that an offsets project generates are calculated by subtracting the emissions of a world that has the project in it from the emissions of an otherwise-identical possible world that doesn’t. This latter world represents the ‘baseline.’ The quantity of offsets credits that are generated and available to sell is equivalent to the emissions reductions beyond this baseline. In order for the system to work, this baseline has to be accurately determined. Without an accurate baseline, sellers wouldn’t know how much of their commodity they were actually selling, and buyers wouldn’t know how much they were buying. The assessment by experts and verifiers of the hypothetical scenario without the project is, at best, informed guesswork. Many ‘without-project’ scenarios are always possible. As Larry Lohmann points out in his treatise on carbon trading, ‘The choice of which one to be used in calculating carbon credits is a matter of political decision rather than economic or technical prediction.’ The credibility of all offsets projects is further undermined because today’s emissions are not the equivalent of emissions being ‘neutralised’ over a period of time. The reason why the offset companies can argue for carbon neutrality is they are using a carbon calculation method that is best termed ‘future value accounting.’ In other words, carbon savings expected to be made in the future are counted as savings made in the present. This was the same technique used by Enron to inflate its profits and it had disastrous consequences. Each time someone offsets their emissions, the amount of CO2 emitted is automatically in the atmosphere, whereas the period of ‘neutralisation’ takes place over a much-longer time period, sometimes 100 years. If that person keeps offsetting regularly, their rate of emissions rises at a much faster rate than the rate at which their activities are being ‘neutralised’ — to the point at which, far from being climate neutral, quite the opposite is true. The act of commodification at the heart of offset schemes assigns a financial value to the impetus that someone may feel to take climate action, and neatly transforms this potential to bring about change into another market transaction. There is then no urgent need for people to question the underlying assumptions about the nature of the social and economic structures that brought about climate change in the first place. One just has to click and pay the assigned price to get ‘experts’ to take action on your behalf. Not only is it ineffective and based on half-baked guessing games and dubious science, it is also very disempowering for the participants. The single most effective — and incontrovertible — way of dealing with climate change is to drastically limit the quantity of fossil fuels being extracted and burnt. Providing support for communities who are resisting the efforts of the industries to extract and burn ever-increasing quantities is one of the most important strategies in dealing with climate change. Yet it is the least encouraged because, unlike carbon offsets, it involves posing a critical challenge to the established systems of corporate power and societal organisation. Promoting a more systemic approach to climate change would not seek to reduce the problem to marketing gimmicks, celebrity endorsements, technological quick-fixes, or neo-colonial exploitation. Any individual, organisation or government embracing this holistic attitude would commit to doing everything they could to reduce their climate impact, but would not offset responsibility for any of their remaining emissions. Rather they would commit to demanding, adopting and supporting climate policies that reduce emissions at source, as opposed to offsets or trading. They would support stricter regulation and oversight and penalties for polluters at community, local, national and international levels. And they would commit to supporting communities adversely impacted by climate change and so-called ‘climate-friendly’ projects. Real solutions to climate change require social change — and time and energy needs to be put towards achieving such ends. This is an extract from the report, The Carbon Neutral Myth – Offset Indulgences for your Climate Sins, published by Carbon Trade Watch — a project of the Transnational Institute
Kevin Smith is a researcher with Carbon Trade Watch, a project of the Transnational Institute. Based in London, he has been active in climate justice issues since the COP 6 summit in Den Haag in 2000.