In the fight against global warming, markets have emerged in recent years for buying and selling what are known as carbon offsets. The money helps pay for projects like tree planting or solar farms that remove or reduce carbon emissions. Sounds good, right? But there are lots of questions whether offsets do what they say they do.
Carbon offsets have been around for a couple of decades. The idea is to counteract activities that emit the heat-trapping pollution that causes global warming. Isaac Panzarella is assistant director at the North Carolina Clean Energy Technology Center at NC State University, which advises companies and institutions on reducing carbon emissions.
A carbon offset basically is a tool that's designed to mitigate emissions from some sort of human activity. That might be manufacturing, heating your home, flying somewhere across the country on an airplane.
Analysts at Morgan Stanley estimate that about 4,000 projects worldwide have issued carbon credits equal to about 1.7 billion gigatons of carbon as of the end of 2022. Buyers — mostly companies and institutions — spent about $2 billion on offsets last year, and the market is expected to grow to about $100 billion by 2030.
Catawba College in Salisbury has used carbon offsets and a related tool called carbon credits to become one of the nation's first certified carbon-neutral campuses.
The college had already reduced its carbon footprint through energy efficiency measures, rooftop solar panels, geothermal energy, and electric vehicles. But that wasn't enough, says Noah Upchurch, senior sustainability specialist at the Catawba College Center for the Environment.
"Offsets are kind of the way that we have to fill in the gap for some of the actions that produce emissions, that either the college is not able to find a solution that's carbon free right now, such as sending our students to study abroad, or other things like the buildings that we haven't been able to transition off of carbon powered heating and cooling," Upchurch said.
Offsets are now a global business whose users include Charlotte-based Bank of America and Honeywell and other big companies like Disney, Google and Delta. Duke Energy has said it's considering using offsets. And the city of Charlotte plans to buy renewable energy credits, or RECs, from two new solar farms and it's evaluating two more.
Buying those RECs helps finance the projects, said John Morrison, interim director of the Catawba College Center for the Environment and a former solar developer.
"The credit is part of the value that a solar facility is creating. And, as such, the developer of the project will typically factor that into the financial assessment of when they do the project. And so it represents a revenue stream, in addition to the sale of the electricity that makes it possible for the project to be done," Morrison said.
People can buy offsets, too. Airlines sell them to make up for the emissions from burning jet fuel. And in the Carolinas and Tennessee, Piedmont Natural Gas will sell you "blocks" of offsets against the natural gas you use at home or in your business, says president Sasha Weintraub.
"We know that there are some individuals who proactively would like to offset their carbon footprint for a variety of things that they do, whether it's an electric vehicle, whether it's the fuel that they use to heat their home," Weintraub said.
Ideally, we would eliminate all carbon-emitting activities. But we're nowhere near that, which is why people have started using carbon offsets, to reach "net zero"- if not actual zero - carbon. The phrase bothers Jim Warren, of the North Carolina environmental group NC WARN.
"This whole concept of net zero carbon … I haven't seen a generally accepted definition even of what it means. Different companies, different things," he said.
But do offsets actually work as advertised? A 9-month investigation last year by Britain's The Guardian newspaper and German weekly Die Zeit found that carbon offsets tied to a program to protect South American rainforests were probably worthless. The papers called them "phantom credits." Other investigations have raised similar concerns.
The Wall Street Journal reported in April that wood products giant Weyerhaeuser, whose business is cutting down trees, is now selling carbon offsets. They're based on the carbon-sequestering potential of its 10.6 million acres of forest land. And a company owned by oil giant BP is now helping small timber farmers generate carbon offsets, too.
Warren said he worries carbon offsets can be manipulated.
"Carbon offsets are very subject to manipulation and rigging. It's like somebody waves a magic wand and says, 'Well, we're gonna keep polluting here. But we're going to do it less somewhere else.' And sometimes that can be a long way off, really hard to track and measure," Warren said.
Morrison agreed. "It does boil down to who's verifying that this reduction, either in energy or carbon emissions, has indeed occurred. And there are different programs with different stringent measures. Some are stringent, some are less so," he said.
Morrison said you need to do your due diligence before using offsets. That's what Catawba did as it strategized about going carbon neutral. The college has said it's paying less than $100,000 a year for two types of offsets. One pays for a project to capture methane from an Asheville landfill. The other will help build solar farms in North Carolina. Catawba's Noah Upchurch says there are cheaper offsets out there. But the college didn't think paying for projects thousands of miles away made sense for its climate goals.
"We wanted to do something that impacted the state of North Carolina, close to the college, and that we knew was coming from a grid with a carbon intensity that matched, which is what we did, or was worse than ours," Upchurch said.
Another key consideration is whether a particular carbon offset represents a project that would have not happened otherwise. If a solar farm or a forest conservation program would have happened anyway or is required by law, can we really say there's added value there to sell as credits?
Upchurch says Catawba College looks at offsets this way:
"If you are an institution, and there are ways that you could reduce directly your consumption of electricity, or other carbon emitting activities, you know, we really make an effort to put those things first," he said.
Added his colleague Morrison: Carbon offsets should be in addition to changes we make — not a free pass to keep polluting.
