A guide to good carbon offsets
Fiona Harvey, April 26, 2007 (Financial Times)
The Financial Times of London, one of the world’s most respected business-oriented daily newspapers and periodicals.
The Times publishes an assessment of what is good and what is not about offsetting.
Presently, there is public pressure on businesses to work against climate change but inadequate clarity on what the best moves are to do so. EU Phase1 ends this year; Phase 2 is 2008 – 2012.
After businesses cut back all they can on emitting greenhouse gases, they can look into investments to offset what they must emit in the course of doing business.
The Financial Times proposes:
1. “Analyse your company’s carbon footprint”
2. “Reduce emissions first”
3. Choose between purchasing offsets from a “regulated” or a “voluntary” market. The EU market is regulated. The Times says “Phase 2” credits are better investments. Also regulated are Certified Emissions Reductions purchasable via the Clean Development Mechanism (CDM) of the Kyoto Protocols. They are more expensive but meet more rigorous standards. Voluntary markets allow for more varied offset programs and less adminstrative costs but less uniformity and administration in programs breeds potential abuse.
4. Offsets can be chosen by the business or by an agent.
click to enlarge
a) “Additionality”: Is this investment funding something that would be done anyway?
b) “Type and location of projects”: What secondary or unintended consequences will be created?
c) “Vintage”: When is the payoff?
d) “Verification”: Is the offset a UN Designated Operational Entity (DOE) of verified by one of the market leaders (SGS Group, TUV or Det Norske Veritas)? Kyoto Protocol-like standards are emerging from by International Emissions Trading Association, the Climate Group, the World Economic Forum, and various environmental charities.
6. “Registry”: The Bank of New York
7. “Forestry”: Planting trees is an especially controversial type of offset.
8. “Cost”: A wide range, especially in voluntary markets, from less than a dollar to $20 and up/ton of carbon
References from the Financial Times:
Financial Times Interactive Guide
F & C Investments Guide to Carbon Offsetting
Business For Social Responsibility Guide