By Robert Bradley Jr. — October 5, 2022
“ClientEarth lawyers have developed a legal briefing that unpacks the problems with carbon offsets and why businesses relying on them should prepare for legal action.”
“… ‘quality’ in the unregulated carbon credit market can be hard to come by, and harder still to verify…. Another issue is there simply isn’t enough room on the planet to plant the number of trees needed … without harming food supply.”
A recent article in ClientEarth, Why carbon offsets don’t work, and the legal risks of marketing them, should send chills down the spine of corporations (and others) that are trying to be “green” despite their natural dependence on fossil fuels. The charge? … “so-called carbon ‘offsets’ hide a massive climate problem and pose a significant legal risk to the companies marketing them.”
The September 30th article begins:
If you’ve bought a flight lately, or filled your car with petrol, you’ve likely been offered a product to ‘offset’ the climate impact of your purchase. While promoted as a solution to the climate crisis, these so-called carbon ‘offsets’ hide a massive climate problem and pose a significant legal risk to the companies marketing them.
ClientEarth lawyers have developed a legal briefing that unpacks the problems with carbon offsets and why businesses relying on them should prepare for legal action….
Carbon offsets are defined as follows:
A carbon credit is calculated to remove or avoid 1 tonne of CO2, which is around the same as the amount of carbon dioxide emitted in a flight from Paris to New York. The purchase of these credits contributes to projects which aim to help mitigate climate instability through funding new technological or natural solutions.
Natural projects, not offset-related, are blessed by ClientEarth:
These natural projects can be valuable in fighting climate change. Good examples support local communities and can help to protect critical natural ecosystems, such as forests, that act as ‘carbon sinks’ absorbing harmful greenhouse gases.
But here are the problems, some of which were described in yesterday’s post:
But ‘quality’ in the unregulated carbon credit market can be hard to come by, and harder still to verify. Often described as a ‘wild west’ industry, too many projects have been found to harm the interests of local communities and offer false claims of actually making a difference to the amount of CO2 absorbed and stored.
Another issue is there simply isn’t enough room on the planet to plant the number of trees needed to counterbalance the current level of global emissions without harming food supply. To put this into perspective, a single oil and gas company plans to use a tenth of the globally available unused land to ‘offset’ its emissions. Enhancing natural sinks will only get us so far, getting to net zero by 2050 is not possible without a hard and fast reduction in emissions.
Carbon credits are not offsets, the article continues, but donations:
Carbon credits are not offsets in the way that a profit offsets a loss. The accurate label for these credits is simply a donation towards climate-friendly projects and not, as marketing for high-carbon products often claims, as a means to ‘offset’ the harmful climate impacts of the things we buy.
Legal issues to such “greenwashing” are in process around the world.
The flawed nature of carbon ‘offsetting’ is attracting a range of legal risks: non-compliance, shareholder action, litigation, and regulatory enforcement.
In the Netherlands, Shell has been reprimanded twice in succession, first for advertising ‘CO2-neutral’ car petrol, then for trying a different claim that carbon credits mean ‘CO2 compensation’.
Dutch airline KLM is facing a court action, which we’re supporting, for breaching consumer law with its CO2 compensation marketing. Total Energies is facing a similar case.
In Germany, a claim is being brought against a list of companies for misleading ‘carbon neutral’ claims.
In the US, financial regulators are getting interested in carbon credit markets. And in France, the government has adopted a new law requiring companies to clarify how emissions are being actually reduced before being offset. The list goes on.
Different laws come into play:
Bans on companies misleading consumers exist in consumer protection laws and advertising regulations in countries all over the world. Using ‘carbon neutral’ or compensation marketing, and giving consumers the impression that the climate impact of high-carbon products is thereby addressed, raises a real risk of being found to breach these prohibitions.
And for companies relying on carbon offsetting in their corporate transition plans, that range of risks increases – with even company directors liable to be held accountable over miscommunication on the impact ‘offsetting’ has on emissions reductions.
Carbon credits are not a “magic wand,” and they distract from real emission reductions. It is mitigation or bust ….
The legal risk of offsetting marketing is growing – but so too is the risk that we blow opportunities to reduce real-world emissions if false schemes continue to proliferate.
To meet climate goals, financial support must be directed at efforts to protect the world’s vital ecosystems, as well as green technologies, and cover the huge funding gap for climate loss and damage. This is where financial contributions through carbon credits can have a valuable role to play, but incentivising finance must not provide a perverse incentive to delay critical reduction measures…. The only way out of this crisis is to stop pumping out greenhouse gases at the current devastating rate. Blurring the picture with fictional offsetting only delays that vital action.
Final Comment
The radical environmentalists’ war on “greenwashing” is a major front in the futile crusade for CO2 mitigation. Perhaps true environmentalists should redirect their aim at grid-connected wind, solar, and batteries instead. A machine in every pristine is hardly ecological, and their sponsors are no more “green” than the average person desiring clean air and water.