Offsets: Part of Carbon Management from Day One

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There is an oft-repeated idea that carbon offsets should be the last step taken to minimize greenhouse gas emissions. Although some accept it as conventional wisdom, there is little to support this premise.

The hierarchy of avoid, reduce, replace and offset is not a time-line; it is a statement of weighted priorities of how best to lower emissions and reduce our respective carbon footprints. Avoiding activities that cause emissions is the purest positive impact in carbon dioxide (CO2) emissions anyone can achieve.

Yet avoiding all -- or even most - of these activities is impossible while sustaining and growing a global economy. Therefore, reducing such activities and increasing efficiency is the next level of hierarchical impact.  Replacing current fuel sources with lower emission fossil fuels and renewable energy is the best way to power activities that must continue.  Offsets from high quality, independently verified projects are the most effective and efficient mechanism for balancing out that portion of a footprint that is not reducible directly.

This all makes perfectly good sense. This hierarchy of impact, however, has at times transformed into a sequential order. As a result, it is often said that offsets should be used only AFTER all else has been accomplished.  

But in any given year the vast majority of carbon footprints can't be eliminated by avoidance, reduction and replacement. Nonetheless, the "last in time" concept is used to justify postponing the purchase of offsets for the irreducible portion to some future year after all avoidance, reduction and replacement activities have been accomplished.

Clearly the most beneficial climate change mitigation strategy is to do all four activities concurrently.  It would be a rare business that could reduce its footprint directly by an amount even approaching 50 percent in the first year. What rationale is there for neglecting to offset the remaining 50 percent?  

It is equally true that in each subsequent year there will be a predictable magnitude of emissions despite the best intentions and efforts of the entire organization to avoid, reduce and replace. Offsetting should be in lock step with direct reduction for maximum environmental impact. Every year an entity doesn't offset the irreducible emissions is a year those emissions become part of the atmosphere and exacerbate the climate crisis.

There is another pragmatic reason to include offsetting as part of a carbon management plan from the beginning: Putting a real cost against each ton of emissions not avoided, reduced or replaced is the best way to drive corporate managers to look at every possibility for direct reduction.

This is business. Financial incentives and personal accountability make things happen. When businesses include a real cost of carbon on the P&L of each manager, set annual reduction targets by division and department, and make meeting carbon objectives part of bonus evaluations, it is a virtual certainty that greater direct reductions will be achieved.

Energy efficiency campaigns are the right idea for creating a culture of conservation in any company -- but putting a price tag on emissions turns a CSR initiative into an economic action plan. Since even small incremental direct reductions often can cover the cost of offsets, making managers responsible for carbon expense is a low risk, zero-net cost tactic. That's good for the environment and that's good for the bottom line.

Every responsible carbon company understands that offsets are not a stand-alone solution and are not a substitute for direct reduction. On the other hand, direct action alone cannot achieve the 80 percent global emissions reduction necessary by 2050 to mitigate climate change. Carbon offsets from high quality projects, verified to widely acknowledged standards, are a critical component of a successful carbon management program from Day One.

Neil Braun is chairman and CEO of The GreenLife Organization in New York City.

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