The beginning of the year has seen the carbon offset markets seething with controversy as breaking stories have cast doubt on its effectiveness. Some organisations involved in the Voluntary Carbon Markets (VCMs) have since attempted to defend the industry, yet many have kept silent. NordSIP reached out to one of the experts in the field, Massimo Di Biaggio, Country Head, Sweden at ClimatePartner, to hear his side of the story and separate the wheat from the chaff.
Innocent until proven guilty
First, we address the elephant in the room. “I believe the headline of the Guardian article is quite misleading,” Di Biaggio starts. “Of the three studies mentioned in the article, one is admittedly negative, one presents ambiguous results and the third even comes to positive results. They all use different methodologies and come to different conclusions.” For Di Biaggio, the journalists did not present a scientifically objective picture. “Claiming that 94% of the carbon offset projects were worthless without mentioning that this figure is based merely on one of the three studies mentioned is sensationalist, from our point of view,” he comments.
Nevertheless, the criticism does have some merit, as it triggers internal reviews and promotes heightened vigilance. “When such accusations are made, we always take them very seriously and we examine them thoroughly,” Di Biaggio states. “In this case, we have demanded a full investigation to be conducted by Verra themselves. Meanwhile, we are also performing our own investigation. We immediately started an internal task force to study the reports and understand their claims. First results are published on our website and new findings are updated continuously,” he adds.
Di Biaggio stresses, however, that for the moment, he and his colleagues haven’t found any reason to doubt Verra’s rebuttal of the criticism. “Until we have proof of the contrary, we believe that what Verra is saying is the truth.”
On 30 January, some 49 carbon offset firms issued a joint statement in defence of the carbon markets after the Guardian article. ClimatePartner was not among them. “Basically, none of the big carbon companies signed it,” Di Biaggio reveals. “I cannot speak for the other ones, but from our point of view, it is too early to draw final conclusions. Sylvera comes to different conclusions than Verra. As long as our own investigations have not been completed, we do not want to make a final statement. Until we have reached another conclusion, we cannot sign Sylvera’s letter,” he adds.
To plant or not to cut trees
Di Biaggio is adamant that we still need well-functioning and transparent carbon credit markets. “Forestry projects, for instance, from conservation to protection and plantation, are absolutely essential if we are to stay below the 1.5 degrees agreed upon in Paris,” he says. “Apart from that, forests have a huge impact on biodiversity and the well-being of people. It is, therefore, vital to have a developed and time-tested mechanism for financing climate projects in the forestry sector, such as carbon credits.”
While on the topic of forestry, it is worth examining the emerging scepticism towards certain projects. Planting trees, for instance, appeals to the investment community, whereas paying people not to cut trees raises suspicions. They feel that such projects might be opening the door for abuse. “Of course, forestry is a very complex topic, and no methodology to estimate the carbon offset is perfect,” explains Di Biaggio. “Existing forests are among the most important carbon sinks on the planet, absorbing about a third of the emissions caused annually by human activities. With tree planting, for instance, the problem is that you are not reducing CO2 from day one. You might be forecasting CO2 absorption by the forests in the long run, but if you think about the Paris agreement, we have six or seven years before we cross the 1.5 degrees limit. And trees don’t grow enough in six or seven years to absorb all the CO2. It is going to be difficult to achieve our climate goals with tree planting only,” he concludes.
Every little helps
In general, Di Biaggio is a firm believer in diversity. “You cannot solve everything by doing just one thing,” he says. There is a variety of carbon offset projects that one can engage in, apart from planting trees, which procure other positive externalities such as social benefits.
“Currently, in the Nordic markets, there is a lot of interest in clean drinking water projects,” he explains, lifting one example. “Installing new boreholes and wells in African countries, for instance, can be seen as a forest conservation project, too. If you don’t have access to pure water or filters, you must cook the water. And to do that, you cut trees, thus exacerbating deforestation.” According to him, the effect is fairly measurable, as it is possible to estimate how many trees are not being cut due to the availability of water filters. In addition to the positive climate impact, the social benefits include lower morbidity as well as time saving, which can be invested in education and productive labour.
Another example is the projects related to direct CO2 capture from the atmosphere. “For the moment, they are terribly expensive,” says Di Biaggio. “But there is a lot of interest, especially in the Nordics, and the idea is that these projects will become cheaper with time. Some entrepreneurial companies want to invest at least a small part in such solutions.”
Standardisation in progress
The industry’s recognition of its limitations has led to the establishment of the Integrity Council for the Voluntary Carbon Market (ICVCM) last year and the proposal for Core Carbon Principles (CCPs) and an assessment framework. According to Di Biaggio, this presents an opportunity to shape the markets towards greater transparency and address the industry’s credibility issues.
“The standards are developing all the time to become more scientific, and there is new knowledge and new sets of data available,” continues Di Biaggio. To reflect the complexity of the projects and to take into account the latest scientific findings, methodologies and systems are in constant development. We work with both Verra and Gold Standard as they complement each other, using different methodologies for different types of projects.”
Di Biaggio believes that the industry is generally unified in terms of promoting climate action to stay below 1.5 degrees. “We compete, of course, but we are united around our main goal.”
Offsetting – just part of the solution
ClimatePartner, one of the oldest and largest companies focusing on CO2 calculations and reduction measuring and offsetting, has been around since 2006. Di Biaggio, who joined the firm about a year and a half ago, opening a Stockholm office, is proud to be part of the team. He explains that ClimatePartner is very much information, data and IT-driven, differentiating it from carbon offset industry peers. “It is a very energetic and entrepreneurial company,” he says. “It feels almost like a start-up in terms of drive, dynamism, and people’s openness to doing new and meaningful things.”
According to Di Biaggio, ClimatePartner has experienced considerable growth in the last few months. “Our expansion is driven by companies’ growing interest in taking climate action and starting to measure, reduce, and of course also compensate,” he explains. “Our focus from the very beginning has been CO2 calculations, and that’s where our IT systems are also very strong in structuring the ways for our experts to do the calculations,” he adds.
Rounding up the conversation, Di Biaggio stresses the importance of working holistically on reducing carbon emissions. Carbon offsetting is not a tool to be used in isolation, as an attempt to buy one’s way out of taking real action, according to him. Di Biaggio is adamant that effective corporate climate action starts with reducing carbon footprint organically first, within the operations and the supply chain. On top of such efforts, however, carbon offsetting is a good way of doing something positive with a company’s remaining emissions and can provide extra help in reaching the overall goals in the short term as well as a stronger incentive, by putting a price on carbon internally.
