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When it comes to offsetting versus mitigating carbon emission, we’ve got it all wrong for decades.

For the past 20 years at least, climate activists (including me) have demanded that we focus our efforts completely on mitigating new emissions. Offsetting was discouraged as it was “probably just greenwashing” anyway – right?

But carbon offsetting and voluntary carbon markets have a much higher potential to reduce global emissions cost-efficiently than you might think. All while accelerating mitigation efforts, too.

In this article, you will learn why:

Let’s get started!

💡 Carbon offsetting makes sense in a global world

Just like other sectors of our economy, some companies or locations have advantages and disadvantages when it comes to mitigating greenhouse gas emissions. For some people it is cheaper to reduce their emissions than for others. Some companies can easily reduce their emissions with little cost, while others need to invest millions in research and development to achieve the same.

And at this point, we should ask ourselves: if someone else can do it cheaper than we can, why shouldn’t we pay them to do it instead?

It has been the foundation of our wealth and created a better life for billions. By going for the low-hanging fruits in the beginning, we can create much more positive impact with the same limited amount of resources & money we have. So, instead of spending 1000 € to buy a new machine which saves one ton of carbon dioxide, we could spend the same amount on funding the mitigation of one hundred tons of carbon dioxide somewhere else on this world.

The climate does not care whether emissions are saved in your backyard or on the other side of the world. The final goal is to get to net-zero as fast as possible.

We have done this in the European Union, but also other places, by establishing mandatory carbon markets (i.e., the ETS – EU Emission Trading System). Here the nation limits the amount of carbon dioxide that may be emitted and whoever wants or needs to emit some, must buy a certificate at this market. They buy it from someone else who bought it for themselves in the first place but is now selling it at a price which is higher than their cost of avoiding another ton of carbon dioxide.

This way, the aviation and cement sectors have been paying the energy sector and other industries to invest in emission reduction, because it is easier (cough cheaper cough) to do it there.

And just as there are differences in mitigation costs between sectors, there are differences across countries and regions, too. Providing rural household in Rwanda with improved cooking stoves can reduce emissions much cheaper (11 $ per ton, e.g., at Gold Standard) than if you try to reduce the same emissions within the European industry (appx. > 80 $ per ton at the EU ETS).

And of course, improved cooking stoves do not only reduce emissions and firewood due to higher efficiency, but they have a triple effect. Since the alternative for many families is cooking on open fire indoors, the new stoves can dramatically reduce health impacts of soot and smoke. They also enable women and children to spend fewer hours per day on collecting firewood. This enables children to stay in school longer and women to work longer on paid jobs, increasing their family’s income. But even if we only look on the climate benefits, we can mitigate appx. 8-10 times more emissions with the same amount of money if we use it with high-quality carbon offsets.

And starting to offset our emissions now has another benefit: time.

🔓 Carbon offsetting helps immediately – and time is crucial

Solving climate change is a race against time. And we do not have any more time to wait: In less than 7 years, we will have missed our chance to stay below 1.5 degrees of global warming.

Since you are reading this newsletter, I assume you are interested in solving climate change. You might even have looked on the climate clock before. If you didn’t, you might be as shocked as I am, every time I look at it. We all, you, and me as individuals, but also the organisations we work for, are responsible for slowing this clock down until it stops ticking. We all contribute to burning through our carbon budget, and it must stop now.

So here is my proposal: Instead of waiting until you have a plan or the technology for avoiding all your personal or your organisation’s emissions, create a rough estimate of how much you emit, add a safety cushion on top, and offset all of it now.

You can start today. And from one day to another, you or your organisation will be carbon neutral. You can even go one step further and buy enough credits to compensate all the emissions that you or your organisation have caused over their lifespan. For example, Microsoft has announced that they will remove all historical emissions from their operations, taking responsibility for the climate damage they have already caused.

I am sure that you and I can too.

If we invest heavily in high quality offsetting (there will be another article on what “high quality” carbon credits really are), we can reduce emissions rapidly in the next few years. This gives us time to mitigate the remaining emissions by slowing down the climate clock.

Offsetting is not a replacement for reducing your own emissions. But it should be your first step, and it can be a dramatic accelerator for your own mitigation efforts, too.

🚀 Carbon offsetting can accelerate your own mitigation efforts

By offsetting all your emissions, you apply a voluntary carbon tax on all your activities. Especially within an organisation, this turns the question of reducing emissions into a question of reducing costs – and companies are notoriously good at reducing costs through operational efficiency.

Suddenly, flights are more expensive to the organisation than they were before, while train tickets stay the same. Buying an electric vehicle instead of a gasoline car, is now a remarkably simple decision if your finance team compares the lifetime cost of both.

Independently from national regulations, you made sure that you are no longer contributing to climate change. You are funding projects that improve the life of hundreds of people. And you deploy a systematic approach that will help you to reduce your own emissions in the next step.

But now the real work begins. You have set the framework for your climate ambitions, and it will support you whenever you make a decision. Now, you must analyse where your emissions come from and how to reduce them. Ask yourself:

  • What are the main emission drivers of my organisation?
  • Can I reduce the need for products and services that are causing emissions?
  • What alternatives do I have to supply the remaining need for a product or service?
  • How much does it cost to reduce my emissions for each emission driver?

When you answered all these questions, sort your action points by cost and start with the cheapest! This way, you can reduce your emissions as fast as possible with the least resources.

This approach is on the one hand inspired by economics, but first by Effective Altruism. If you haven’t heard of it, it’s a philosophy of not only doing good, but trying to do as much good as possible with the limited resources each of us has in a world with limited resources. Feel free to watch this TED talk by Will MacAskill to learn more!

♻️ Compensating is not the final goal, but the most important first step of mitigation

Offset everything now. Then reduce emissions in need of offsetting in the first place.

This allows for an acceleration of global climate action, empowers you to take responsibility for your own climate impact, and provides an acceleration for your internal decarbonisation efforts.

Do you want to calculate and offset your emissions, but don’t know how? Reach out to me on LinkedIn or Twitter. I will support you in finding the best way for you and your organisation to contribute to solving climate change today.

And don’t be afraid of whether you can do enough right away. It’s important to start.

See you next week. 😉 (Haven’t subscribed to The Climate Innovator newsletter yet? Join here!)

Photo by veeterzy on Unsplash

Hey! I'm Lars

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Every Tuesday morning, I publish my climate innovator newsletter. You’ll get insights and deep dives into latest climate innovation. It's short, funny, and to the point.

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