More responses to the Science Based Targets initiative decision about including carbon offsets: “ineffective, harmful even, to the climate cause”
More responses to the Science Based Targets initiative decision about including carbon offsets: “ineffective, harmful even, to the climate cause”
Two letters opposing carbon offsets and one from a carbon trading lobby organisation in favour.
On 9 April 2024, the Board of Trustees of the Science Based Targets initiative (SBTi) announced that it was going to allow the use of carbon offsets to meet Scope 3 emissions reduction targets.
The announcement from SBTi’s Board was a shock — even to the people working at SBTi, who responded with a their own statement writing that, “SBTi are deeply concerned about the content of the statement and the process by which it was developed and released.”
Three days after the announcement, SBTi’s Board clarified that no decision had yet been made on including carbon offsets:
In July [2024], a discussion paper with a draft proposal from SBTi about potential changes to Scope 3 will be published which will feed into the standard draft (drafting phase).
But the initial announcement about using carbon offsets is still available on SBTi’s website — as if the decision has already been made.
There have been several more letters to SBTi’s Board of Trustees. Here are three of them — two opposing offsets and one in favour.
H&M
A letter from Leyla Ertur, head of sustainability at Swedish clothing company H&M, states that allowing the use of carbon credits, “weakens corporate climate pledges and makes real decarbonization efforts within value chains less attractive”.
Ertur writes that the use of carbon credits would “deter the investments and innovation we need to achieve systemic change”. She writes that it would be a move away from “a robust scientific foundation and a governance structure that allows for transparent and independent science-based standards, [which] would undermine principles that we believe are fundamental for real climate action.”
The West African Alliance on Carbon Markets and Climate Finance
On 6 June 2024, Reuters reported that “A group of 10 West African countries” had written to SBTi in favour of allowing the use of carbon credits.
The letter states that report questioning the validity of offsetting emissions were the work of “misguided activists”. And that, “To us, carbon markets is climate finance. There is no alternative. We are at a pivotal moment.”
Reuters notes that the main author of the letter was Ousmane Fall Sarr, the coordinator of the West African Alliance on Carbon Markets and Climate Finance. The letter is signed by “West African Alliance Member Countries representatives”, according to QCIntel. So to describe the letter as coming from “West African countries” is a bit of a stretch.
Ousmane told Reuters that,
The SBTi is, rightly or wrongly, the gatekeeper that can unlock finance from corporations around the world that wish to contribute to climate action . . . at the same time as (and not instead of) taking action to decarbonise their valuation.
QCIntel describes the Alliance as a “grassroots organisation”. That’s more than a stretch. That’s just gaslighting.
According to its website, the West African Alliance on Carbon Markets and Climate Finance is, “a platform aimed at fostering carbon markets and results-based climate finance”.
Ousmane Fall Sarr, the coordinator of the Alliance is on the board of the carbon credit certifying organisation Cercarbono. He’s worked on two reports for Climate Focus, a pro-carbon trading consulting firm that is incorporated in the tax haven of the Netherlands. He’s a member of the Expert Panel of the The Integrity Council for the Voluntary Carbon Market.
The West African Alliance on Carbon Markets and Climate Finance is funded by the International Climate Initiative of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. At COP27, the UK gave the Alliance £180,000 to expand the “website into a strategic tool for carbon market engagement and capacity building”.
So, the West African Alliance on Carbon Markets and Climate Finance is a lobby organisation for carbon markets with funding from Germany and the UK.
378 “seasoned practitioners of SBTi standards”
On 18 June 2024, Environmental Finance published another letter to the SBTi, under the headline, “Why the SBTi must abandon its offsetting proposal”.
The lead author of the letter is Alain Grandjean of the French climate consulting firm Carbone 4. The company explains in more detail on its website why carbon offsets are greenwashing and not part of a solution to the climate crisis:
From a physical point of view, a ton of GHG avoided is not equivalent to a ton of GHG emitted: the latter corresponds to a gas currently present in the atmosphere, whereas the former corresponds to a theoretical difference between actual emissions and those that could have taken place.
Here is the letter to the SBTi Board in full:
Ten years after its creation, the Science-based targets initiative (SBTi) has validated the climate objectives of over 4,000 companies, establishing itself as a key label for climate commitment. However, on 9 April, this year, the organisation's Board of Trustees announced its intention to authorise the use of “Environmental Attribute Certificates”, including carbon credits, to achieve Scope 3 emissions reduction targets.
This announcement has sparked indignation among many climate action players, insofar as it negates the SBTi's raison d’être, tarnishes the credibility of companies that have complied with it, and dangerously delays the collective action needed for the ecological transition.
That is why we, the signatories of this letter and seasoned practitioners of SBTi standards, call on the organisation to abandon this development. The letter was signed by 378 people, some of whom are listed below.
More specifically, we condemn the authorisation of “Environmental Attribute Certificates” in this context for two main reasons: it is contrary to the scientific consensus and ineffective, harmful even, to the climate cause.
The SBTi Board's proposal is contrary to the scientific consensus, which invalidates the offsetting approach consisting of using carbon credits to achieve emission reduction targets (see for example IPCC, WGIII, chapter 7, which shows that the potential for sequestration is limited and does not enable the offsetting of all current emissions).
Whether the credits are aimed at avoiding or sequestering emissions, they put different physical realities on the same level, by comparing actual induced emissions with emissions potentially avoided or potentially captured in a different timeframe and geography.
In order to contribute to global carbon neutrality at the right level, a company must act in three simultaneous but separate ways: by reducing its own emissions to a minimum, by helping others to reduce their emissions (by marketing low- carbon solutions or financing other stakeholders' low-carbon projects) and by contributing to the net creation of carbon sinks within and outside its value chain.
Stepping away from the offsetting approach, carbon credits can be useful instruments for contributing to the financing of low-carbon projects. Some reporting frameworks, such as the Net Zero Initiative, have sought to offer an alternative to offsetting that is compatible with these requirements.
What's more, the SBTi Board's proposal is ineffective and even harmful to the climate cause, for at least four reasons:
Firstly, it perpetuates the illusion that climate change is a challenge that can be met with little effort, by means of a few financial transactions, and in isolation from the other players in the economy. It obscures the fact that the effort associated with scope 3 actually requires collaboration between the stakeholders in a value chain, in order to radically transform it. This collaboration is essential to overcome the barriers to action that exist today.
Secondly, it does not encourage companies to rethink their business models to limit their dependence on greenhouse gases. Suggesting that the climate crisis can be solved by buying carbon credits hides the risks and opportunities created by the transition towards a low-carbon economy (new regulations, markets, technologies, etc.).
Thirdly, this decision sends out the wrong signals regarding the channelling of financial flows, by allowing companies that have bought carbon credits to be judged by investors in the same light as those that have undertaken a profound transformation of their value chains.
Lastly, it encourages the purchase of less expensive, low-quality carbon credits. Companies may focus all their attention on optimising a single indicator (induced emissions minus carbon credits). This in turn runs the risk of favouring the development of many cheaper but less viable projects at the expense of more expensive but higher quality projects that need financing.
It is therefore in the name of scientific rigour and effective climate action that we call on SBTi Board to abandon this proposal.
We encourage the organisation to open a collective debate on the mechanisms for reducing Scope 3 emissions and contributing to carbon neutrality, which require greater ambition, pragmatism and practical experience.
Selected signatories of the letter:
Alain Grandjean, Partner, Carbone 4
Daniel Baal, President, Crédit Mutuel Alliance Fédérale
Pascal Demurger, Managing director, MAIF
Axelle Lemaire, Executive Director Sustainability and Corporate Social Responsibility, Sopra Steria
Carine De Boissezon, Chief Impact Officer EDF and Vice-President, C3D
Nicolas Jolyn, CEO, ICADE
Charlotte Gardes, Climate Change, Energy & Financial Stability Expert, IMF
Cecile Duflot, Managing director, Oxfam France
Lucie Pinson, Managing Director, Reclaim Finance
Camilole Putois, CamilleMember of the WBCSD Imperatives Advisory Board
Eric Duvaude, Director of Sustainability Standards - ANC, member of EFRAG TEG
Julia Faure, Co-president, Mouvement Impact France
Benoît Chéhêre, Climate change strategy at Michelin
Chris, you've pounded the best nail into the coffin of Offsets here!