What is the Carbon Reduction Commitment?

Carbon offsetting has really taken off in the last decade as a way for companies in industrialised countries to become carbon neutral, even though they are producing plenty of carbon dioxide and other greenhouse gases. The principle of carbon offsets is that a company calculates its level of carbon emissions, and its production of other greenhouse gases, and then pays for projects that soak up the same amount of emissions, so that its own production is cancelled out.

Carbon offset projects have been criticised for several reasons, but the main two are that this does not provide an incentive for companies to work hard on reducing their emissions, and that it is difficult to monitor with any accuracy. Many carbon offset projects have been found to be bogus and corruption has been discovered. Organisations are claiming that their projects are using up carbon dioxide, or that they are destroying or removing other greenhouse gases from the atmosphere, but there are concerns that the calculations have been fudged.

Checking Out Carbon Offset Projects

This is something that is very hard for companies in industrialised countries to do. Organisations such as the Carbon Trust oversee some of the better projects, but close monitoring of all projects is really impractical. This is illustrated by a project involving wind power in China, which shows just how companies can make big mistakes.

Chinese Wind Power Projects Controversy

China has been developing a substantial system of wind power generation over the last few years and large companies in the west, run largely by the United Nations Framework Convention on Climate Change, have been paying huge amounts of money to China for providing ‘additional’ power using wind turbines. Early in 2010, controversy erupted because there was doubt that Chinese wind farms were actually producing anything more than they had ever intended to. There was an accusation that they were taking the money to fund the wind power generation projects for their own benefit, but were not really offsetting anything produced by the west.

Another Recent Scandal Involving the United Nations

Another particularly concerning carbon offset scandal again involves the United Nations but is also implicates the World Bank. The debate centres on a carbon offset scheme called the Clean Development Mechanism, which was set up as part of the Kyoto Protocol, an international treaty that aims to reduce the level of greenhouse gases produced by industrial processes. The Clean Development Mechanism rewards a group of about 20 chemical plants that are located in developing countries, such as China and India.

The plants in question destroy hydrofluorocarbon-23, which is a greenhouse gas that has nearly 12 000 times the impact of carbon dioxide. There is a global vested interest in reducing production of this gas as much as possible. Although technically not carbon offsets, more greenhouse gas offsets, the World Bank has invested billions of dollars in two such plants in China, buying offset credits.

This is very good for business for the destruction plants, and they have been caught out – they actually seem to be overproducing the gas so that they can then destroy more of it and earn more money from offset credits. The World Bank currently argues that the system is not corrupt, so the controversy rages on.

The Future for Carbon Offset Projects

Many experts are predicting that the whole concept of carbon offsets will have to be rethought with some regulation necessary in the future. Companies tend to use carbon offsets to promote themselves as a truly ‘green’ company and consumers are very swayed by the thought of dealing with a carbon neutral organisation. While buyers of carbon offsets think they are doing the right thing, they may just be wasting their money.

Overall, a company policy of reducing waste, increasing energy efficiency and managing carbon offset projects nearer to home, that can be checked out more easily, may be the way forward.