Carbon offsetting: who’s really winning?

To tackle climate change and poverty, we need to look past win-win solutions and start asking tough questions.

Talia Calnek-Sugin's picture
Talia Calnek-Sugin is a communications assistant for LSE Cities
07 July 2020
Rubbish and black bin bags are strewn around

Rubbish and black bin bags are strewn around a landfill site in Mar del Plata, Buenos Aires, Argentina (Photo: copyright

'Win-win solution’ is one of the hottest catchphrases in environmental policy. Liberal politicians tout legislation that will grow the economy while cutting emissions, businesses promise shareholders they will continue to profit while slashing carbon footprints, and international aid institutions stress the sustainable development imperative to lift billions out of poverty while stopping catastrophic climate change.

Now, spurred by COVID-19 and the impetus to ‘build back better’, there’s renewed emphasis on policies that will reboot the economy while delivering a greener future.

Perhaps the most far-reaching example of a ‘win-win’ (in this case ‘triple-win’) solution is carbon offsetting. Through investing in projects that reduce emissions, most often in the global South, individuals and companies can theoretically counterbalance their contributions to climate change. Offsets will not only benefit the environment, but also – as promised by the UNFCCC (PDF) – reduce poverty in developing countries.

The United Nations' Clean Development Mechanism (CDM), established under the Kyoto Protocol, was the first major offsetting scheme. Signatories unable to meet their binding emissions targets could compensate through emissions-reduction investments in developing countries.

To date, there have been more than 8,100 CDM projects in 111 countries, focusing on renewable energy, energy efficiency, and reforestation. The "co-benefits" of these projects, as the UNFCCC website catalogue displays, span from “poverty reduction” and “job generation” to “community empowerment”.

Offsets – off target

Carbon offsets have been presented as common sense because they epitomise the flexibility economists tell us is essential for meeting climate targets at the lowest cost. But critics argue that the CDM has neither substantially reduced emissions or alleviated poverty.

We are nowhere near meeting global emissions targets, and the illusion that we can continue to consume as usual may be hindering more radical efforts to decarbonise. Further studies show that the CDM has made little progress addressing poverty – and sometimes negatively affects host communities. 

Take India: the government puts rural poverty alleviation at the heart of its development agenda, yet most CDM projects focus on industrial emissions in the least rural regions. Or Chiapas, Mexico, where a CDM reforestation project has dispossessed indigenous communities of ancestral lands. Consider Buenos Aires, Argentina: a methane-flaring landfill (PDF) project has sickened thousands of slum-residents by incentivising waste incineration far above the landfill’s capacity.

Extensive technical fixes have been rolled out in response to the CDM’s failures. Certification schemes, like the Gold Standard, promise consumers that their carbon offsets will have real development benefits. Increasingly complex frameworks verify CDM projects’ emission reductions. These reforms have arguably increased transparency for carbon offset consumers and reduced corruption by CDM project operators.

Getting real

But we’re missing the point.

We’re not going to keep global warming to 1.5°C by planting trees in Chiapas or flaring methane in Buenos Aires. We’re not going to bring billions out of poverty by hiring people to reforest or transport waste.

When we propose a technocratic win-win solution to climate change and poverty, we in the global North absolve ourselves of collective responsibility for creating these problems.

We tell ourselves that by paying a small fraction of our salaries for emissions reductions in developing countries, we can continue to consume as usual, while ostensibly undoing our contribution to climate change. By throwing around the phrase 'win-win', there are questions we don’t answer: who wins? Who defines win-win? Why do some people win while others lose?

This isn’t to say that initiatives can’t reduce environmental impact and improve the lives of those living in poverty. I worked for a Mexican organisation that fused indigenous knowledge with modern engineering to develop community-led sustainable development projects such as strategically planting trees that sequester CO2 and reduce landside risk.

This was a win-win solution, but it did not purport to be universally applicable to different contexts like the CDM.

A group of men working on a reforestation project

A community reforestation project that fuses indigenous knowledge with modern engineering to create sustainable development projects in La Montaña de Guerrero, Mexico (Photo: copyright Cooperación Comunitaria)

The way we tell this story matters. When we perpetuate the myths that we can keep on consuming and that development interventions from the global North will end poverty, we give politicians, businesses and individuals a way out of admitting tough political realities and making difficult sacrifices.

The carbon offsetting market continues to grow. Before we try to buy our way out of the global crises of climate change and inequality, we need to start asking ourselves some tough questions.

If we really want everyone to win, we need to start admitting who is winning now. And if we truly support win-win solutions for those living in poverty, we need to listen to what win-win means to them.

About the author

Talia Calnek-Sugin is completing her MSc in environment and development at the London School of Economics and is also the communications assistant for LSE Cities.

Talia Calnek-Sugin's picture