Is the Carbon Market Fake?

COP26 was around the corner and everyone is debating about how we can save the world. I mean, why wouldn't we if the world leaders are about to make the biggest decisions on how we can survive climate change. Yet, a debate is in the air. In a world that demands negative emissions, why are people suddenly against the carbon market?

Hey everyone, it's Fabian from the think-team. A few weeks ago I was invited to become a panelist about the Carbon Market in Green School's sustainable solutions day. In su-re.co, I've been working for almost two years trying to refine a carbon offset project that you can read about here: 1, 2, 3. I've done my fair share of studies about the market and how the system works, so it was interesting for me to share my thoughts on the panel discussion.

Photo credits: Green School Bali

There were so many interesting questions from "how big is one ton of CO2e" to "why are people calling out the carbon market as fake" Specifically, Polluters Out, an activist movement demanded the following:

Reject false solutions - especially carbon markets in Article 6 of the Paris Agreement - and advance people-led climate solutions that are proven, respect traditional knowledge, practices, wisdom, and resilience of indigenous peoples, women, and local communities, and protect the rights of their lands and territories.

I was very excited to answer this question because it is targeting a larger systematic problem from the symptoms that we see.

Why is carbon offsetting controversial?

Just like anything that generates income, it can be abused for the worse. Carbon Offsetting is subject to greenwashing. Without a foolproof system to validate claims, trust is needed, and when trust exists, the system is not needed. So, some carbon offset companies may not even offset carbon. Or in some more hopeful cases, may just not offset truthfully. In general, carbon offset may also stimulate a behavior where people think their consequences can be removed or reversed. In reality, is a bit more complicated than that.

So on one hand, it is not enough to purchase a carbon offset and call oneself a hero, but neither does purchasing organic or wholefoods. Our CEO once wrote a blog about "is fairtrade is actually fair". Bluntly I said "in a hyper-capitalistic society, there is almost no chance of ethical consumption." Perhaps that's a little extreme, but as long as giants are in control, we need to rethink how our consumption directs to positive impact.

I appreciate the alternative solutions said by "Polluters out", which promotes more concrete and experience-proven solutions. These 'solutions' are a bit more holistic than carbon offset. As opposed to focusing only on environmental impacts, such solutions are also focusing on social and economic. This adds to the argument that calling yourself a savior from carbon offsetting is incomplete, since the climate crisis is more than an environmental problem.

So the next question was, Should we be considering offsetting in our personal lives? which heavily relates to the question How are standards of carbon offset projects verified?

Yes! But... if you consider offsetting carbon, be sure to do your research. Understand how the MRV (Monitoring, Reporting, Verifying) system works and know who you are paying for. Third parties aren't bad people, they are just mediators. So be sure to understand the layers between you and the beneficiaries. This is why in su-re.co, we are trying to make a carbon offset program with Biogas Digesters that is as transparent as possible.

Going back to Is the Carbon Market Fake?

In the grand scheme of things, sure maybe you can say the carbon market is fake, because it's not THE (only) solution to Climate Change. But calling it fake wouldn't do justice to what it also does. On the micro-scale, it teaches us to be aware of our consequences and at least find pathways to make our impacts more positive. On the slightly larger scale, it supports projects that are doing their best to contribute to something. Financing mechanisms are needed in especially smaller projects, so there is no reason to bully the carbon market for doing that. A solution that is too small won't make a big impact either.

So what the Carbon Market teaches us is that there is a much more fundamental problem than a Carbon Offset seller. There are many lanes to be filled in tackling multifaceted problems like the Climate Crisis. Carbon market fills one lane and that does not make it the most superior. Our duty is to understand which lanes we can fill, and which ones we can recommend others to do so.

Photo credits: Green School Bali

It was an honor to sit next to the many talented students in the panel discussion. I am grateful to see that there are many young people interested in this topic. I hope this article brings more clarification to anyone in general. So after this, are you considering offsetting your carbon? if so/not why?