Should carbon offsetting play a role in achieving a net-zero-carbon target?

COMMENT Net zero carbon has come of age as a phrase in 2020, but a common understanding of what it actually means remains elusive. The principle is relatively straightforward – to get to a net-zero-carbon position you need to take as much CO2 out of the atmosphere as you put out. At Hammerson, our target is to be net positive, so we’re aiming to take out more than we emit. As an industry we are getting much better at working out how much CO2 we release. Regulatory requirements have driven significant improvements in data gathering and analysis, and while there is still a way to go, we can now calculate direct business emissions to a common standard. Once you have calculated your emissions, you can reduce them. For property that must start with reducing energy demand through good management, investment in new technology and good design for new buildings. Starting with demand reduction is critically important; we have to tackle the source of the sector’s contribution to climate change. Rapid reductions Progress in emissions reduction is being made, but not quickly enough. The problem is urgent; we need rapid, significant reductions in global carbon emissions, so we need a solution today. One solution is businesses compensating for remaining carbon emissions by enabling reductions. Carbon offsets don’t always feel like the most responsible way to achieve a net-zero-carbon target. They tend to be relatively cheap and, if you are sitting in London, come from projects far away. Carbon offsetting has also been associated with PR and greenwashing. However, genuine offsets have an important role to play. There are three critical points about carbon offsets: They must be the last thing you do – reducing your own direct emissions must come first. They should be independently verified to an industry-recognised standard. Their contribution to your carbon emissions reductions should reduce over time. Currently, only carbon offsetting projects in a limited range of countries can be verified. These are mostly lower-income countries. This encourages financial support for emissions reduction projects that otherwise would not happen and is part of the value of offsetting – it is a relatively efficient market mechanism for allocating capital to where it is needed most. For example, a fully verified carbon offsetting project can significantly reduce the use of solid fuels for cooking or establish solar energy in Africa. These are valuable projects, and the emissions reductions are very real. Focus on the goal The classic carbon offsetting example tends to be the planting of trees. Planting trees is incredibly important and positive for climate change, but trees planted now will only reduce carbon emissions in five or more years’ time. And if at any point in the future they are used for fuel, or just burnt for land clearance, all that sequestered carbon will be emitted, bringing you back to square one. Offsetting verification standards account for this, and verified projects will monitor and report on emissions reductions. Changes due in 2021 are expected to make offsetting in home countries verifiable. This could see the establishment of projects to channel investment to local infrastructure improvements such as the removal of gas boilers, insulation programmes or energy efficiency projects, helping address hard-to-reach local projects by tackling them at sufficient scale to make them financially viable and manageable. However, carbon credits achieved through these schemes are likely to be more expensive than those achieved through traditional projects in low-income countries. The goals are clear: remove carbon emissions from the atmosphere as rapidly as possible, and avoid adding more. That means every company taking responsibility for reducing emissions from their portfolios, both existing and development, as far as they can and finding a way to compensate for the remainder. Net-zero-carbon targets combined with an efficient, transparent and robust offsetting market mechanism present a practical approach for companies to take. Louise Ellison is group head of sustainability at Hammerson and chair of the Better Buildings Partnership