Carbon offsetting is a widespread tool in efforts to achieve net zero emissions. But current approaches to offsetting are unlikely to deliver the types of offsets needed to achieve global climate goals. Net zero pledges from many companies, such as those recently from BP and Google, and the recent 2060 “carbon neutrality” pledge from China are likely to use offsets. But what types of offsets are acceptable and under what conditions should they be used? Launched today, The Oxford Principles for Net Zero Aligned Carbon Offsetting (or ‘The Oxford Offsetting Principles’), provide guidelines to help ensure offsetting actually helps to achieve a net zero society.
Carbon offsetting, if done properly, can contribute to net zero strategies, especially in hard-to-decarbonize sectors such as aviation and agriculture. However, offsetting, if not done well, can result in greenwashing and create negative unintended impacts for people and the environment.
There are four key elements to credible net zero aligned offsetting, according to the multidisciplinary team from the University of Oxford:
- Prioritise reducing your own emissions first, ensure the environmental integrity of any offsets used, and disclose how offsets are used.
- Shift offsetting towards carbon removal, where offsets directly remove carbon from the atmosphere;
- Shift offsetting towards long-lived storage, which removes carbon from the atmosphere permanently or almost permanently; and
- Support for the development of a market for net zero aligned offsets.
The report also highlights the need for a credible approach to nature-based carbon offsets, such as forest restoration.
The authors hope The Oxford Offsetting Principles will provide a key resource for the design and delivery of rigorous voluntary net zero commitments by government, cities and companies, and help to align work on credible offsetting around the world.
Professor Cameron Hepburn, Director of the Smith School of Enterprise and the Environment and co-author said, ‘Adopting the Oxford Offsetting Principles and publicising their adoption can create the demand for offsets necessary to reach net zero emissions. Creating demand for long-lived greenhouse gas removal and storage is vital, whether we like it or not, to reaching the Paris goals.’
Dr Fredi Otto, Associate Professor and Associate Director of the Environmental Change Institute at the University of Oxford and co-author said, ‘Most offsets available today are emission reductions, which are necessary but will not get and crucially keep us at net zero. We need carbon removals that scrub carbon directly from the atmosphere to counteract ongoing emissions.’
Professor Nathalie Seddon, Director of the Nature-based Solutions Initiative at the University of Oxford and co-author said, ‘High-quality nature-based offsets support biodiversity and enhance adaptation to climate-change whilst safeguarding the incomes and rights of local communities. Irrespective of any carbon benefits, scaling up the protection and restoration of ecosystems is vital. While carbon offsets can help to fund some of this work, nature-based solutions should be valued and funded for the broad suite of benefits they bring, now and into the future. However, nature-based solutions are not an alternative to geological storage and rapid decarbonisation of the economy.’
Professor Yadvinder Malhi FRS, Professor of Ecosystems Science at the University of Oxford and co-author said, ‘Ecosystem restoration activities such as reforestation can make a limited but significant contribution to addressing the immediate goals of limiting peak global temperatures in the next few decades while providing many biodiversity benefits, but in the longer term these carbon stores are at risk of reversal if ecosystems are degraded. Offsetting needs to take account of this risk of reversal.’
Professor Myles Allen, Professor of Geosystem Science at the University of Oxford and co-author said, ‘In the end, offsetting schemes need to recognise that the only way to compensate for the impact of pulling carbon out of rocks is to put it back. We need eventually to move to 100% long-lived storage of carbon dioxide if we are to continue using fossil fuels through the transition to a net zero world.’
Dr Ben Caldecott, Lombard Odier Associate Professor of Sustainable Finance at the University of Oxford, COP26 Strategy Advisor for Finance, and co-author said, ‘Observing the Oxford Offsetting Principles will help ensure that users avoid buying low-quality offsets and that their decarbonisation plans are compatible with achieving net zero. The Oxford Offsetting Principles can be used by financial institutions to design and deliver credible plans for achieving net zero. Financial institutions can also assess the plans of investees and borrowers. This can inform risk and impact analysis, as well as engagement and stewardship activities.’
Dr Thomas Hale, Associate Professor of Public Policy at the University of Oxford and co-author said, ‘A wide range of voluntary and regulatory standards currently govern both approaches to offsetting and how net zero is defined. Actors adopting the Principles should work to ensure that such regulations and standards evolve to reflect a science-based approach to offsetting and net zero.’
Dr Stephen Smith, Project Manager, Greenhouse Gas Removal Hub and co-author said, ‘Countries, cities and companies should definitely prioritise shrinking own carbon footprint, as these Principles make clear. But financing further efforts elsewhere, done well, can help too. The Oxford Offsetting Principles set out a direction of travel to make offsets part of the solution to end global warming.’