Carbon offsets: What are they and do they really work?
May 30, 2023
Carbon credits are the heart of the federal government’s new climate bill - but what are carbon offsets and do they really work? Olivia Sanders reports.
Australia’s 215 biggest industrial polluters will be mandated to compensate for their emissions through carbon credits under the federal government’s signature climate deal which will begin rolling out from July 2023.
The new laws make changes to the safeguard mechanism implemented by the former Liberal and National Party government in 2016
It won’t ban new gas and coal projects but it does include a hard cap on emissions to be lowered each year until 2030 which Greens leader Adam Bandt believes could block about half of the 116 new facility proposals.
But carbon offsets are the true heart of the bill because while industrial polluters can go over their annual emissions allowance, they will be required by law to offset excess emissions by purchasing carbon credits.
According to the Australia Institute’s Climate and Energy Program Director Polly Hemming, carbon offsets are “at its most basic, a way to compensate for putting CO2 and other greenhouse gases into the atmosphere.”
Carbon offset projects like tree planting, forest preservation, and methane capture are designed to reduce, avoid, or store carbon dioxide.
And for every tonne of CO2 these projects stop from entering the atmosphere, the people who run them earn one carbon credit which industrial polluters can buy to balance out their emissions.
But Ms Hemming said while “it’s a nice simple maths equation and it looks really nice in the textbooks, it doesn’t often work out quite as simply as that.”
Because buying carbon offsets means industrial polluters can "temporarily say that they’ve neutralised their emissions” without actually lowering them.
Ms Hemming called 2020-2030 “the critical decade when we need to be cutting emissions as fast as possible.”
“But businesses are still burning fossil fuels, fossil fuel companies are still opening up new gas basins, new coal mines - and we’re still saying that’s okay as long as everything’s offset.”
“So even if carbon offsets did everything that they’re supposed
to and they safely and permanently avoid or stored CO2 forever,
they’re not a pathway to decarbonisation.”
But according to Ms Hemming, “there is a lot of evidence in Australia and internationally that carbon offsets don’t actually work.”
An investigation by The Guardian, Die Ziet, and SourceMaterial found that over 90 per cent of rainforest offset projects certified by the world’s leading carbon offset standard, Verra, were “worthless”.
And “only a handful of Verra’s rainforest projects showed evidence of deforestation reductions… with further analysis indicating that 94% of the credits had no benefit to the climate.”
Verra has disputed the claims.
