Friends of the Earth slams "fundamentally flawed" offsetting model

Report argues carbon offset mechanisms are beyond reform and should be scrapped

James Murray, BusinessGreen, 02 Jun 2009

The practice of carbon offsetting is "profoundly unjust" and "fundamentally flawed", according to a critical new report from Friends of the Earth.

A Dangerous Distraction, which calls on the UK government to ditch calls for an expansion of UN-backed offsetting schemes, argues there is now ample evidence to show that offsetting is "ineffective and damaging".

The report has been released to coincide with international talks in Bonn this week, where reforms designed to expand the UN's Clean Development Mechanism (CDM) offsetting scheme to include forestry are expected to be high up the agenda.

It collates many of the criticisms levelled at the emerging offsetting industry in recent years, including evidence that many of the projects backed by carbon offset investment would have happened anyway. It also says that many industrial energy efficiency projects approved by the CDM result in significant carbon emissions, and argues that offsetting allows western governments and businesses to delay action to curb their own emissions.

"Western governments are cheating us all by plotting to expand carbon offsetting at the UN climate talks - which means avoiding real action through dodgy accounting instead of taking bold action to tackle the climate crisis," said Andy Atkins, executive director at Friends of the Earth. "Carbon offsetting is doing nothing to combat climate change, is putting the lives and livelihoods of millions of people at risk and is entrenching inequality between rich and developing countries' levels of emissions."

The report also criticises proposals to extend the CDM to cover forestry protection projects through Reduced Emissions from Degradation and Deforestation (REDD) mechanisms, arguing that the promise of generating revenues from forests would result in a "land grab" that will put indigenous forest communities at risk.

It also argues that because the proposals currently being considered at Bonn would allow for some plantations to be counted as forests, any attempt to include forests in the CDM could inadvertently lead to them being replaced with large monoculture plantations that only store 20 per cent of the carbon of intact forests.

The UN is currently working on reforms to the CDM designed to better ensure that projects deliver verifiable carbon emissions, while many of the leading private offset suppliers now subscribe to international standards intended to similarly confirm that real emission savings result from offset investments.

However, a spokesman for Friends of the Earth said: "As it currently stands, the CDM is unreformable and should be scrapped." He added that while many governments supported offsetting as it provided a cheaper alternative to reducing emissions at home, there was now enough evidence to show the approach's ineffectiveness.

A spokeswoman for the Department of Energy and Climate Change defended the government's support for carbon offsetting, rejecting the suggestion that the model is fundamentally flawed.

"Offsetting has a role to play in cutting emissions and can bring finance and other benefits to developing countries," she said. "The central issues are getting the safeguards right, making it as transparent and eventually moving to a more holistic approach to cutting emissions as part of a global carbon market. "

She added that work on how to finance forestry schemes was on-going, but insisted that the basic goal of "recognising the carbon value of forests so that they are worth more standing than felled" would help tackle deforestation.

She also argued that offsetting was not being used as wholesale alternative to domestic emission reductions, arguing that both the EU emissions trading scheme and UK cliomate change bill capped the extent to which countries can rely on offset credits to meet emission reduction targets.

© Incisive Media Ltd. 2009 Incisive Media Limited

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