On Carbon Offsetting
Highlands Rewilding’s Response to the Jan 18th Guardian Article “Revealed: more than 90% of rainforest carbon offsets by biggest provider are worthless, analysis shows”.
Summary
Highlands Rewilding welcomes the recent Guardian, Die Zeit and SourceMaterial investigation into carbon offset credits. We believe that continuous and rigorous scrutiny is essential to ensure that carbon and other nature-based credits genuinely contribute to climate change mitigation and biodiversity recovery. This investigation raises a number of issues that we see as particularly important:
One-to-one offsetting of continued greenhouse gas emissions is not a reliable method of climate change mitigation if used in isolation. Such offsetting distracts from the immediate need to directly reduce emissions, is far less reliable than direct reductions, and results in greenwashing of damaging practices. We do not participate in offsetting of this kind.
Offsets based on ‘avoided loss’ are particularly unreliable and cannot be equated with immediate emissions reductions. We do not participate in offsetting of this kind either.
We recognise the urgent need to make environmentally beneficial land management a profitable option for farmers, foresters and other land managers around the world. We seek to help this happen using net-positive credits based on active improvement - rather than avoided damage - sold retrospectively on the basis of measurements from a baseline, or issued only as provisional until confirmed where retrospective sale is not possible.
A main focus of our work is increasing the accuracy of the measurements used in carbon and biodiversity credits, and to ensure that accuracy is embedded in credit schemes themselves.
We are developing credits with strong co-benefits for biodiversity, carbon and people, to ensure that their effects are ‘net positive’ across the board, as well as in any one sector.
To ensure that we achieve these aims, we base everything we do in the latest science. We employ scientists, support the research of others, offer our land as an 'open air laboratory' to researchers, and are fully transparent in our methods and calculation so that our claims can always be verified.
Finally, we believe that safeguards are needed not only on sellers of credits, but also on buyers. We are currently exploring the creation of a ‘seller’s charter’, that would set out our expectations of the companies we would allow to purchase any credits we produce. Companies that have no meaningful plan to rapidly reduce emissions (e.g., a Science Based Target) beyond the use of carbon offsets would not be eligible under such a charter.
If regulated and scrutinised properly, we believe that the natural capital market has the potential to channel billions of pounds of otherwise inaccessible private finance into carbon sequestration and nature restoration projects worldwide, and so make an essential contribution to avoiding the worst impacts of climate change and biodiversity loss.
Avoided loss vs removal credits
Carbon credits can be calculated and verified for different activities. The Guardian article, and reports and papers it relates to, are focused on REDD+ rainforest avoided loss credits verified by Verra. These are credits produced where the finance raised is used to protect rainforests at risk of destruction, hence avoiding the loss of the existing stock of carbon and protecting future sequestration by the forest. Proving the risk to existing forests will always be tough – it’s almost always hard to know what might happen in the absence of carbon finance. As set out in the Source Material report:
“‘Avoided deforestation’ has always been controversial. At best, it underpins projects that save some of the planet’s most precious resources from destruction. At worst, it risks degenerating into a sort of protection racket where landowners extract fees in return for promises not to fire up the chainsaws. Often, it occupies a grey area in between, relying on hypothetical projections that can be tough to verify.”
Avoided loss credits are very different from removal credits, where the finance is used to create projects that enable new carbon sequestration (removal from the atmosphere), for example the planting of new rainforest in areas previously deforested.
We believe carbon offsets can – and often do – cause more harm than good, by allowing continued emissions at a time when emissions reductions are crucial. Where used, we do not see avoided loss as a suitable basis for such offsets. Even under the most careful monitoring, avoided loss is uncertain in its veracity, magnitude and permanence. It cannot be equated to known emissions from the burning of fossil fuels.
At Highlands Rewilding, we are exploring credits for carbon sequestration and land-based emissions reduction through the active restoration of degraded land. We are working with Peatland Action and others to restore the Peatland areas at our Bunloit estate, which we estimate has the potential to reduce emissions from that peat by 800 tonnes of carbon dioxide equivalent per year. At Beldorney, we are planting new woodland in areas previously used for sheep grazing, that would have been ancient woodlands in the distant past, thereby creating new carbon sequestration.
Measurement
Before we allow these credits to be sold or used, we measure the impacts of our management as accurately as possible. These measurements are never 100% accurate, and so they can only be safely used for strongly net positive outcomes where they don’t risk concealing net emissions, and not for one-to-one offsetting.
We have worked closely with a number of UK-based verification schemes and know that many experts have fed into the development and continual improvement of these carbon calculations over the years. We are also working and engaging with several exciting and innovative researchers and companies using new technology to more accurately calculate the real-world results of restoration activities (for example, the actual volume of biomass), and hence carbon from tree growth in a newly planted forest. Often this generates surprising results, for example the recent report that shows almost twice as much carbon may be stored in natural broadleaf woodland in the UK than current models show, making existing models too conservative.
We believe that a movement to regular measurement of actual results, using these new technologies to verify the impacts of restoration, will provide much-needed rigor to the market, and identify projects that give confidence to buyers of credits. The value of this oversight has been demonstrated by the Guardian investigation’s use of data from Renoster - a carbon markets rating consultancy that aims to increase market transparency using remote sensing (i.e., satellites) to measure actual impact of avoided deforestation projects.
Highlands Rewilding intends to use the most up-to-date, repeatable, and scientifically rigorous methods available to measure and verify actual change in the natural systems on the estates we manage. By repeating these measurement activities every 5 years, we then aim to calculate and sell best-in-class credits for the impact we have then proved, rather than modelled forward projections.
Avoiding greenwashing – A Sellers Charter?
We clearly need to channel more finance into protecting rainforests, and stronger policy is needed to stop the rates of deforestation – hopefully the 30 x 30 targets developed at the UN COP15 in Montreal in December will be the turning point here (with appropriate protections for Indigenous people, who currently protect 80% of the worlds remaining biodiversity.) However, that needed finance cannot enable existing companies to carry on business as usual. For example, a second article in the Guardian has revealed that Shell - one of the five largest oil companies in the world – plans to “spend more than $450m (£367m) to invest in carbon offsetting projects, and plans to buy the equivalent of half the current market for nature offsets every year.” A previous report in 2021 by Action Aid on Shell’s 2050 net-zero plans showed:
“To reach net zero emissions by 2050, Shell plans to offset 120 million tonnes of CO2 from its polluting activities by planting forests. ActionAid’s analysis finds this would need 12 million hectares of land by 2030 – the equivalent of three times the size of the Netherlands.
Instead of phasing out fossil fuels over the next decade to cut harmful CO2 emissions, Shell will continue investing $4 billion a year in fossil gas, and $8 billion a year on oil and gas exploration, compared to just $2-3 billion in renewable energy.”
Clearly, this is a crazy situation, at a time when the executive director of the IEA (an organisation originally set up to promote the oil and gas industry) has stated that “If governments are serious about the climate crisis, there can be no new investments in oil, gas and coal, from now – from this year."
The need to channel large amounts of private financing into nature restoration without greenwashing the operations of the most polluting companies is clearly a major challenge, and requires more than careful design of credits. Highlands Rewilding believes we need to show the highest levels of seller integrity in addressing this challenge. Where there is currently a lot of work focused on the integrity of the carbon credits themselves – such as the Integrity Council for the Voluntary Carbon Market (ICVCM) - there is little discussion about who should be able to buy carbon (and other credits) from developers.
We are currently exploring the creation of a seller’s charter – setting out our expectations of the companies we chose to partner with to buy any credits we produce. An example of a minimum standard on carbon would be a buyer company having made a public commitment to reaching net zero emissions by 2050 at the latest, having a clear reduction plan and to have signed up to an externally validated and credible initiative to deliver on this commitment, such as the Science Based Targets Initiative. We know that others in the industry are working on similar lines.
We believe that carbon credits – and other ecosystem credits as they emerge – should never be used as an excuse to avoid the hard work needed to transition business models into those aligned with a livable planet. Aligned with scientifically robust decarbonisation trajectories, however, they can be a multiplier of organisational impact, funneling much needed finances into nature restoration and protection activities. Rather than a zero-sum game, we believe that the most forward-thinking companies will show leadership as net-positive organisations, with the new game being how much positive impact they can have on the planet through their operations, rather than a race to being the ‘least bad’ in the pack. Highlands Rewilding aims to create the best-in-class opportunities for such companies to invest in.