What Is the Carbon Offset?
Imagine you’re on the couch watching TV when suddenly a drop of water hits your head. You feel your hair. It’s water alright, then another splash. You look up and see droplets on the ceiling. Something’s leaking upstairs. Gotta talk to the neighbor.
“Hey there,” you say. “Something’s leaking through your floor into my living room.”
“Ah yes! Indeed it is! I’ve had my bathtub running since this morning,” he says, smiling. “Frankly, I thought you’d notice sooner.”
“What? Why was your bathtub on all day?”
“I have to shower. Is that not allowed?”
“Of course it is, but you’re spilling everywhere! If you don’t turn it off, you’ll flood everyone below!”
“Relax!” he says, patting you on the shoulder. “I already paid someone to clean up the mess.”
“You… paid someone? Where are they?”
“Oh, they won’t be coming here, but they will clean up a mess somewhere.”
You’re puzzled. “Why don’t you just turn off the water?”
“Listen, neighbor. I have to shower. I’m sorry it inconveniences you, but it's part of life. At least I’m doing my part to clean it up.”
The Cost of Doing Business
Ever hear of carbon? It’s that thing that makes diamonds, coal—even your body. When airborne, carbon traps heat and warms the earth. No matter whose smokestack it leaves or which company is responsible, carbon is everybody’s problem once it’s in the atmosphere.
But pollution is a part of life. Nothing is 100% efficient, so there will always be waste. The important thing is that we act responsibly to protect the environment.
Here’s the good news: green energy offsets carbon emissions. With enough trees and other carbon sinks, it’s possible to slow the runaway train of climate change. But there's a catch: it costs money. Like, a lot of money.
In walks a man wearing a business suit and cowboy hat. “Howdy there! Somebody say they need money for climate change?”
The climate change problem has put brands in a global spotlight. Businesses that pollute are bad, and if word of that gets around, people might stop buying from them.
“It just so happens my business does some climate changin’ ourselves. Seein’ as you need money and we need customers, I think we got us a deal. All you need to do is tell folks we don’t do much pollutin’.”
This is the carbon offset: corporate America’s latest ploy to weather the climate change crisis. Printed on bags of chips and burrito wrappers everywhere is cutesy font reassuring you that while the planet bakes in factory exhaust—some of which is theirs—others will clean up after them.
By paying for carbon offsets, companies redirect the public stink eye from their pollution to their selfless climate stewardship. In usual corporate greenwashing fashion, carbon offset is business speak for “not changing our business model.”
Crying in a Lamborghini
So what is carbon offsetting? It’s when businesses make up for their pollution by funding green energy development elsewhere in the world. Think of it like a billion-dollar indulgence industry—they pollute in private, but in public they are climate champions.
Quick question for you: if a business earns its money by polluting the environment, will a tax fix their business model or slow their pollution? Of course not.
Like the 2008 recession, carbon offsets use mind-numbing finance jargon to wrap an obvious problem in arcane obscurity. Wall Street schemes aim to ensure no one’s income suffers—certainly not over some silly nonsense about global warming.
Money doesn’t solve climate change—money buys things that fight climate change, but charging a fee to pollute our environment only serves those on the receiving end of the transaction.
Nobody's Buying It, Are They?
There’s always money to be made somewhere. With the right PR campaign, you can actually convince people that rampant pollution isn’t necessarily bad for the environment. 'Carbon neutral' rides the coattails of 'carbon negative' hoping to be seen the same way.
But hey, it’s not all bad is it? Climate offsetting does some good, doesn't it? Let’s take a look.
Millions of dollars go toward protecting already protected forests, peat swamp forests in Indonesia are being cleared to plant trees which store far less carbon, and developers are double-dipping by profiting off of land already marked for clearing.
But the worst example was in Uganda, where a Norwegian company called Green Resources kicked entire communities off their land, wiped out local vegetation, then planted acres of just one species of tree.
It's the birth of carbon colonialism—an era where multinationals invest in other peoples’ land under the guise of solving their own pollution problem. It’s profiteering, only with a new label.
Who Benefits from Carbon Offsets?
Unless it’s profitable, businesses don’t make changes—after all, corporations are bound by law to grow shareholder value. As such, carbon offsets weren't initially well-received since businesses now had to pay extra to pollute.
Who did they pay? In the beginning, some of those payees were homeowners whose roofs were fitted with solar panels. Just a few years ago, local utility companies had to buy back customer energy and redistribute it throughout the grid—how’s that for carbon offsetting?
Today though, sellers are more like stock brokers shouting above the noise to sell energy for whatever they can. In Maryland, for example, the state’s SREC program assigns a serial number for excess solar energy. Buyers and sellers then meet at a marketplace to exchange these units.
But even those days are coming to an end. New Jersey announced plans to end its SREC program this year, and that trend will likely spread to other states.
There’s always money to be made somewhere. Rumor has it that Tesla/Solar City no longer gives customers access to the carbon credits they earn. Instead, those credits remain the property of Tesla, a billion-dollar corporation that has likely found more profitable ways to use them.
The Good News
Democrats and Republicans have squabbled over green energy initiatives longer than anyone remembers, most notably when Reagan took down the White House solar panels installed by Jimmy Carter.
But while agreement is hard to find about how to stem climate change (or even if it exists), anyone can see how carbon offsetting is an insider’s game that makes little meaningful change.
This is a good thing. This is accountability. As the greenwashing practices of brands like Nestlé, Coca-Cola and Walmart become more transparent, they might be forced to actually fix something.
With enough voices, we may finally see real change.