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What are offsets?

Environmental offsetting enables a company, country or individual to be legally or morally allowed to pollute or otherwise damage the environment as long as they pay someone else somewhere else to attempt to compensate for some or all of the negative consequences. The most common offsets are carbon offsets and biodiversity offsets, but there have been discussions about introducing ecosystem and even cultural offsets.

This section focuses on carbon offsets. To read more about biodiversity or other offsetting visit www.fern.org/biodiversityoffsetting.

What are carbon offset projects?

Carbon offsets create carbon credits which businesses, countries and individuals can buy to compensate for emissions reductions they would otherwise have to make. Carbon offsets are a key part of most existing and planned carbon trading schemes, though they have now been ruled out of the EU Emissions Trading System from 2020 onwards. Carbon offset credits can be bought voluntarily by those wishing to assuage guilt or show their green credentials, but the majority are bought by businesses and governments legally bound to reduce their emissions, or by governments seeking to strengthen the carbon trading market.

Carbon offsetting in general has a number of systemic flaws, most of which are dealt with in Fern’s report Trading Carbon. How it works and why it is controversial and briefing Designed to Fail. Carbon Trade Watch also outlines a number of offsetting projects that have intended and unintended negative consequences.

Forest carbon offsets are particularly problematic as forest carbon sinks can easily become carbon sources. Carbon dioxide through deliberate human activities such as intensified forest harvests and changes in land use, as well as natural events such as pest infestations, diseases and forest fires. Other concerns unique to forest carbon offsets are the impossibility of measuring the amounts of carbon being stored and sequestered by forests. For more information about the problems with forest carbon offsets see Carbon Discredited: Why the EU should steer clear of forest carbon offsets and Counting the cost: forest credits and their effect on carbon markets.

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Most recent publications

Carving new commodities out of Nature: Clarifying conceptual issues & overview of initiatives

This presentation was given by Jutta Kill at the European Cross Networking Meeting on the Global Crises in Brussels on 3 May 2012. It describes how Ecosystem financing can be seen as the creation of additional fictitious commodities out of those parts of Nature that have until now not been viewed, considered, treated and / or exchanged as commodities. These possible new "commodities" include intellectual property, carbon, species, ecosystem functions, natural beauty and water. 

Banking on carbon markets: Why the European Investment Bank got it wrong in the fight against climate change

This briefing provides an overview of the publicly documented involvement of the European Investment Bank (EIB) in support of failing carbon markets. It is based on a report by the organisations Counter Balance and Campagna per la riforma della banca mondiale (CRBM). The original report is available here.

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PDF iconBanking on carbon markets.pdf405.89 KB

Why carbon markets will not deliver for Southern governments, forests and people

Many governments believe that carbon trading will provide substantial funding to protect or sustainably manage forests in their countries via proposed schemes to Reduce Emissions from Deforestation and Degradation (REDD). This briefing, signed on to by 28 organisations explains why carbon markets will not deliver for Southern governments, forests and peoples.
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PDF iconcarbonleaflet_25nov.pdf326.76 KB

An end to forest offsets

This manual was put together by the partners of the Grundtvig Learning Partnership “Forests and climate protection – merging topics in environmental education”. It provides background information for developing new approaches in environmental education focusing on the intricate relation of forests and climate. For fully footnoted and referenced information about the problems with carbon trading and offsets please see Designed to fail.

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PDF iconAn-end-to-forest-offsets-final.pdf355.36 KB

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