Carbon credits can help offer a greener future
Not all carbon credit schemes deserve the greenwashing label: how they can actually play an important role in ESG and net-zero strategies
3 minutes to read
Businesses are under increasing pressure from both their customers and governments to become carbon neutral.
In an ideal world, they would achieve this by reducing all their greenhouse gas emissions – mainly carbon dioxide (CO2) and methane - to zero. In reality, it is impossible for the vast majority to achieve this, and that’s where carbon offsetting comes in.
To take the remainder of their carbon emissions off their balance sheet and be considered “net zero”, polluters can either pay a third party to sequester an equivalent amount of carbon to what they are emitting, for example by planting trees, improving soil, or restoring peatland, or do it themselves.
The transaction takes the form of a tradable carbon credit. Each credit equates to one tonne of CO2 equivalent (tCO2e) emissions, which in volume terms is roughly 560 cubic metres of CO2.
Credit values fluctuate based on supply and demand, but they can generate significant income streams for the entities that are creating and selling them, such as farms or estates in the UK.
Far Ralia, currently on the market. CGI images shows the approved project which will deliver an estimated 346,000 carbon credits and nature restoration at scale.
Greenwashing
It sounds sensible and simple. But the system is open to abuse leading to accusations of greenwashing on both sides of the carbon offsetting arrangement.
Many environmental campaigners believe offsetting simply allows businesses to continue polluting. Why make expensive changes to cut carbon emissions when you can just spend less buying carbon credits?
And the credits themselves are coming under increasing scrutiny. The market is currently unregulated and not especially transparent. Allegations are rife that some of the credits being sold, particularly those based on projects in the developing world, are not delivering genuine carbon mitigation measures, or are overestimating their benefits.
High integrity
So, does that mean the entire offsetting system is flawed? I don’t believe so. Fundamentally, I believe the premise is sound and can genuinely contribute to nature restoration around the world.
But for it to have credibility there needs to be increased vetting of both credit providers and purchasers overlain with a moral, as well as a financial, imperative. The opportunity for the UK to be a market leader in the so-called high-integrity carbon credit market is clear.
We already have a highly transparent and regulated credit market in the form of the government-established Woodland and Peatland Codes, and hopefully a soil code is coming soon. These encourage tree planting and moorland restoration on a large scale, boosting biodiversity significantly.
Credit creators such as Oxygen Conservation are driven by a genuine passion to bring back nature and will only sell credits to those businesses that are committed to reducing their own emissions. Each credit is totally transparent with the purchaser even able to visit the individual trees sequestering the carbon in question.
In conclusion, it is sadly true that not all carbon credits are what they seem. But with the appropriate due diligence, it is still possible to use them as part of your net zero and ESG journey and in the battle against biodiversity loss.
Rich Stockdale, CEO of Oxygen Conservation. Their popular podcast, Short Room Sessions, interviews key leaders and trailblazers in the conservation space.
Interested in the opportunities that rural estates may offer? Read more here, or alternatively contact James to discuss opportunities for your business.
Read our full interview with Rich Stockdale in the latest edition of The Rural Report.
Cover image credit: Josh Craddock, Oxygen Conservation © 2024