First reduce what you can, then offset the remainder
For many organisations, particularly progressive ones that are embracing the low carbon economy, being carbon neutral or even carbon negative is the ultimate goal. This not only buys organisational credibility but also has massive marketing potential by attracting the rapidly growing green consumer out there. Carbon taxation to be implemented on 1 January 2016, cap and trade and emissions reporting are not too far off within South Africa and early adopters will see the most benefit in this emerging market place.
The challenge we face in South Africa however is our reliance on a dirty energy provider in the form of Eskom. The carbon dioxide created through the generation of 1 kWh of energy is around 1 kg according to Eskom’s published calculations. Guess what? The second dirtiest energy mix on the planet behind Poland! This means that the carbon footprint of your organisation is impacted by the strategies of Eskom and the lack of a choice in renewables of our electricity mix. Don’t throw your hands up in despair however. Change is in the air, but change will take time. In the meantime, you can look to offsetting to meet your organisational goals.
So what do we mean by offsetting and what are the pitfalls? Offsetting is a means of ‘neutralising’ the carbon created through your particular business process by purchasing an equivalent carbon offset. By purchasing a carbon offset, you are essentially investing your money in a renewable energy project, a reforestation project or such like. The key challenge is to ensure that your money goes to the project and this is where accountability and auditability are paramount.
Carbon offsets take the form of CER’s, VER’s and REC’s. Without going into too much detail, CER’s (Certified Emission Reduction) are essentially the most valuable and auditable and are done under the auspices of the Kyoto Protocol and the Clean Development Mechanism. VER’s (Voluntary Emission Reduction) fall outside of Kyoto but still offer credibility through verification of the offset by 3rd party organisations. REC’s (Renewable Energy Certificates) essentially promote investment in renewable energy.
Of fundamental importance is the credibility of the offset provider. Of equal importance is also additionality and permanence.
Additionality refers to the concept that the offset project would not have occured in the absence of the financial impetus provided by the sale of the offset. For example, a project that yields significant economic value through cost savings would occur in a business as usual context and therefore would not meet the requirements of additionality. In another example, I draw on a reforestation project where slash and burn is common practice in a local community. The financial value derived from the sale of an offset provides the incentive to change from slash and burn common practice to a sustainable land management approach. This change in behaviour would not have occured in the absence of this promise of financial return, and therefore is additional.
Permanence refers to whether the emission reduction is irreversible. For example, in a tree planting programme, to ensure permanance one needs to look for assurance that in the long term the trees are maintained and not cut down and burnt. In the reforestation example above, by adopting sustainable forest management practices carbon sequestrated is stored and replenished in the forest biomass. This needs to be continuously monitored and measured by a verification body to ensure permanance.
Some verification programmes also require sustainable development and therefore uplift the communities in question and address broader social challenges.
With proper verification, these concepts and more are addressed and in the short term offsetting does provide a viable option to reduce your own carbon footprint. But make sure your resources are wisely invested.
So in summary, if after completing all of your energy savings initiatives, you still have a carbon footprint the size of half the planet, don’t give in, offset! Yes, die hard environmentalists will have you believe that offsetting is merely moving the issue somewhere else and the key challenge is reducing our reliance on fossil fuels. There is no denying this argument, however, in the short term market dynamics are driving offsetting which is not a negative thing. The funds created in a free market can drive change and although we definitely need government and policy makers to make some significant changes at the summit in Copenhagen, offsetting does provide a viable alternative to many of the challenges we face. This is particularly true in South Africa where we have very little choice other than to purchase our energy through Eskom.