Government offset standards: robust or restrictive?

The government has today unveiled new standards for carbon offsetting schemes in an attempt to increase consumer confidence in the growing market and eradicate cowboy operators.

But the proposals have received a mixed reception, with some offset providers claiming that smaller, community-based carbon reduction projects will find it impossible to attain the standard.

The government standard and code of best practice are based on the existing Kyoto carbon market where carbon can only be traded if the offset project goes through a rigorous certification process such as that provided under the UN Clean Development Mechanism (CDM).

Environment Secretary David Miliband said the standard would raise the bar for the offsetting industry and provide consumers with assurances that when they pay for offsets the money is spent on projects that deliver genuine carbon dioxide emission reductions. There have been growing concerns that some cowboy operators have been guilty of selling the same carbon credit several times over and operating projects with limited impact on emissions.

"People need to be sure that the way they offset is actually making a difference," Miliband said. "The Government's standard and code of practice, with a quality mark so people can check easily before they choose an offsetting product, will help to provide that certainty."

The standards are now be open to consultation until the 13th of April, but the government said it had already secured support for the proposals from four carbon offset providers - PURE the Clean Planet Trust, Global Cool, Equiclimate and Carbon Offsets Ltd - as well as First Choice Holidays, Lastminute.com and Rough Guides travel books.

However, just four of the UK's 61 offset operators have endorsed the standard so far and many of these firms claim that the narrow criteria imposed by the government standard will exclude a large number of valid carbon reduction projects.

"We thoroughly welcome the government's involvement and recognise the need for robust standards," said Michael Buick of offset provider ClimateCare. "But the standards have to be appropriate and there are a lot of smaller projects that simply can't afford to go through the Kyoto accreditation."

He pointed to ClimateCare's well publicised project to deliver fuel efficient stoves to developing world communities as the type of community level project that reduces carbon emissions but would struggle to afford the registration and auditing costs required to gain CDM approval. He added that ClimateCare had also been involved in the development of two offsetting standards - the Climate Group-backed Voluntary Carbon Standard and the Gold Standard for Voluntary Offsets – as it too attempts to drive cowboy operators out of the market.

Bill Sneyd of The CarbonNeutral Company – which also operates projects in accordance with its Carbon Neutral Protocol standard – agreed that the new government standard would exclude valuable smaller projects that can not meet the bureaucratic requirements.

However, Philip Wolski, head of fundraising at Pure, said that the UN-backed certification schemes were the only way of reassuring customers that they are contributing to projects that deliver quantifiable reductions in carbon emissions. "The UN backing is mainly focused on major clean technology investment projects, in areas such as wind farms and hydroelectric, that deliver tangible emissions reductions," he said. "Also, because it is UN-backed you know proper planning and development protocols have been followed to limit the imp act on the indigenous population."

He added that Pure's approach meant that when it buys carbon credits off of UN-approved projects they are taken off of the global carbon market, ensuring firms operating in the EU trading emissions scheme can no longer buy them and effectively use them as a license to continue to pollute.

"Projects like planting trees and sending efficient domestic equipment to developing nations are laudable and have great benefits in terms of bio-diversity and alleviating poverty," he argued. "But in terms of climate change their impact is negligible. If people want to donate to support wildlife or combat poverty they should, but if they want to tackle climate change the investment needs to focus on large projects."

Both ClimateCare and The CarbonNeutral Company dismissed suggestions that the impact of smaller projects were negligible and argued that projects with a " human face" were also more attractive to public and corporate customers considering offsetting.

"The CDM projects are enormous, but getting an airline customer engaged on climate change with a project on destroying harmful gasses in a Chinese factory is difficult," said Sneyd. "We are responding to demand for projects that also offer an element of [economic and social] sustainability."

However, he added that The CarbonNeutral Company was also involved in CDM projects alongside its voluntary offset projects and planned to expand its investment in UN-approved projects as demand increases.

Similarly, Buick said ClimateCare's project development teams were investigating sourcing projects from the Kyoto market and claimed that if DEFRA does go through with the proposed standard then the company would offer Kyoto-based credits to customers.

Though he did warn that such credits would be more expensive, due to the cost of compliance. "It'll be interesting to see if customers prefer to buy the Kyot o-backed offsets or the projects with a more human face," he said.

However, a spokeswoman for DEFRA insisted that smaller projects would not be automatically excluded from the new standard, claiming that almost half of CDM projects were small-scale projects and that recent changes to the initiative had lowered the levy small projects had to pay to enter the scheme. She added that the UN was also working to improve the distribution of approved projects, particularly in Africa.

"We recognise that there are benefits to some projects beyond certified emissions reductions that people might take into account when choosing an offset product -- like landscape benefits or biodiversity benefits," she said. "The standard we have proposed is about saying that if a consumer wants certainty and clarity about their offsetting product -- that the emissions reductions haven't been double counted, that they are actually avoiding emissions elsewhere in the world, that there is a clear audit trail -- then the proposed Government standard will be able to provide that."