Is Carbon Neutral the Enemy?

Being or becoming carbon neutral means balancing out the emissions you or your business creates by financing projects to reduce the equivalent emissions (offsetting). This article looks at the pros and cons of carbon neutrality and discusses whether we can simply offset our way out of the climate crisis (spoiler, we can’t) or whether having a carbon neutral strategy could be slowing down carbon reduction efforts.

No, aiming for carbon neutrality is helpful

Carbon offsetting benefits people and planet

Despite the bad press associated with carbon offsetting, there are advantages.

Financing nature-based solutions can have a positive impact on indigenous communities. As well as removing carbon, projects can provide people with a stable income, increase biodiversity, help with soil health and food security. 

Nature based carbon offsetting can support Indigenous communities.

Investing in carbon capture and other carbon removal technologies locks in carbon and can help develop and advance these solutions as well as help bring the price down in the future.

Carbon neutral is a step in the right direction

Some would argue that becoming carbon neutral is the first part, a stepping stone if you will, on the Net Zero journey. We don’t dispute this, but in our experience, companies that had a carbon neutral approach 3 years ago are now realising that this strategy is no longer sufficient or sustainable and are embarking on a science-based Net Zero carbon reduction plan. 

Carbon neutral is better than nothing and helps maintain BAU

Other than estimating their carbon emissions, assigning a budget and selecting some projects, a carbon neutral strategy takes relatively little time and energy to put in place, allowing the company to continue doing whatever it does best. After all, when there is no government pressure and limited consumer pressure, it’s good that they are doing something rather than nothing.

Yes, a carbon neutral strategy is damaging

Carbon offsetting can be ineffective

Offsetting has, for some time, been subject to a lot of criticism and not without reason. Neither types of offsetting (removal and avoidance), are perfect. 

Carbon removal via tree planting can be variable. Trees take a long time to grow and reach optimum size/age (around 35 years) for carbon storage. Tree crops can also fail and trees can burn down in devastating forest fires.

Trees must mature to achieve optimum carbon sequestration.

Carbon removal, via Carbon Capture and Storage (CCS) technologies, is currently expensive, energy intensive and involves a range of uncertainties which are well documented here. These challenges are slowing the roll out rate of these technologies meaning there is currently a limit to the amount of emissions we can deal with this way.

Carbon avoidance projects have been highly criticised too. With this method of offsetting, companies pay someone else not to create additional carbon emissions. (I.e not chopping a forest down for palm oil production). The problem is that these projects are certified by self-regulating bodies called carbon registries. The ‘big 4’ carbon registries are Gold Standard, Verra, American Carbon Registry and Climate Action Reserve.

The question is do they truly offset carbon? A Bloomberg report says: “study after study has indicated that most offsets available on the market don’t reliably reduce emissions.”

Some offsets represent renewable energy projects that would have happened anyway whilst some protect areas of land that are already protected by other means. Other projects hinge on politics. Under Bolsonaro, much of the Brazilian rainforest was under threat, but since he left office, this threat has significantly diminished, so what are companies really paying for?

Carbon offsetting can harm indigenous communities

Studies have also shown that indigenous communities are key to protecting forested areas and preventing deforestation. Trees can too easily be planted in the wrong places and local communities have been displaced due to land grabbing for carbon offsetting projects. This has an overall detrimental rather than positive effect.

Carbon neutral is misunderstood by customers

In 2022, a survey concluded that 59% of Americans don’t know what the term ‘carbon neutral’ means. Companies such as Mars and Mondelez who, amongst others, are using the term carbon neutral to signpost a degree of environmental responsibility or sustainability, could therefore be seen as greenwashing due to a lack of transparency around their strategy and terminology. Calling themselves carbon neutral in this instance is clearly not helping the average customer make an informed purchase decision. 

Carbon offsetting delays carbon reduction

Companies focused on buying offsets to cover their emissions could lag behind in carbon reduction terms. With their emissions “taken care of” by their offsetting projects, they may be less motivated to address the root causes of their emissions. This could result in a failure to reduce their emissions by 90% or more to meet a science-based Net Zero target of 2050. Every year a company delays taking action to reduce their emissions, the harder they will have to work to reduce them each year. 

The money invested in offsetting could be used for reduction

If a company investing in offsetting projects diverted that money to actually reducing their net emissions instead, the net effect would be arguably better because there would be no risk that the offsets bought wouldn’t cover the emissions generated. Plus, there will likely be additional cost savings and team learnings.

ecollective’s conclusion

We’d be lying if we said we weren’t concerned about companies setting carbon neutral strategies at this point (just 7 short years from 2030, when science says we need to have reduced emissions by 45%). We agree the Science Based Targets initiative (SBTi), that the best course of action is for companies to employ a Net Zero strategy. To do this successfully, companies have to move away from a ‘business as usual mindset’ and embed carbon reduction into every element of their business.

Companies also need to be much more transparent with their customers about their carbon reduction strategy and what this entails.

If you’re looking to get the ball rolling and measure your company’s carbon footprint so you can identify the hotspots for reduction in your business, get in touch.