I am scratching my head. What is going on here? I am totally confused; feel betrayed that we even allow this “crap” to occur. Do we really think current efforts are going to help climate change?

In this blog, we look at the effectiveness of carbon credits or offsets, which are the primary tools that companies and organisations use to reduce their carbon footprint, target reaching net zero. We look at the basic definition, pros and cons, starting with my friend Google Bard and then taking and deep dive into why this system is flawed and arguing for a new approach.

This topic is necessary and relevant to companies, individuals, governments and NGOs.

I will also address carbon taxes the EU levies and look at greenwashing in carbon sequestration. Ultimately suggesting a new approach.

Basic info on Carbon offsets

Carbon credits or offsets are a way for companies to compensate for their greenhouse gas emissions. They can be purchased from projects that reduce or remove greenhouse gases from the atmosphere, such as renewable energy projects, forest conservation projects, or energy efficiency projects.

The effectiveness of carbon credits or offsets depends on a number of factors, including:

· The type of project: Some projects are more effective than others at reducing or removing greenhouse gases.

· The quality of the project: The project should be verified by a reputable organisation to ensure that it is actually reducing or removing greenhouse gases.

· The additionality of the project: The project should be additional, meaning that it would not have happened without the purchase of carbon credits or offsets.

· The permanence of the project: The project should be permanent, meaning that the greenhouse gas reductions or removals will last for the long term.

There is some debate about the effectiveness of carbon credits or offsets. Some people argue that they are ineffective because they do not actually reduce the amount of greenhouse gases in the atmosphere. Others argue that they are effective because they can help to reduce the demand for fossil fuels and promote the development of renewable energy projects.

Essentially, there are two categories:

Voluntary Carbon Market - includes a market that enables companies and individuals to purchase carbon offsets voluntarily with no intended use for compliance purposes.

Regulated Carbon Market - includes a market created and regulated by mandatory national, regional, or international carbon reduction regimes.

Overall, the effectiveness of carbon credits or offsets is a complex issue with no easy answers. However, they can be a potential tool for companies to reduce their greenhouse gas emissions and help to mitigate climate change.

Here are some of the pros and cons of carbon credits or offsets:

Pros:

· They can help companies to reduce their greenhouse gas emissions.

· They can promote the development of renewable energy projects and other climate-friendly activities.

· They can provide financial incentives for projects that reduce or remove greenhouse gases.

Cons:

· They can be expensive.

· The quality of projects can vary.

· The effectiveness of projects can be difficult to measure.

· They can be used to greenwash the activities of companies.

Ultimately, deciding whether to purchase carbon credits or offsets is complex and should be made case-by-case. Companies should carefully consider the pros and cons of carbon credits or offsets before deciding.

Carbon Taxes

The European Union adopted the world’s first carbon border tax in May, which comes into effect from the start of 2026 and has raised concern among exporting nations in the developing world.

Under the Carbon Border Adjustment Mechanism (CBAM), the EU will tax imports whose production emits high carbon emissions, beginning with cement, iron and steel, aluminum, fertilizers and electricity.

Carbon Sequestration

This includes:

• Direct air carbon capture (DAC) is an exciting technology that can help combat climate change by removing carbon dioxide (CO2) from the atmosphere

· Oceans absorb 30% of emissions, driven by huge carbon pumps

· Nature Trees, Reforestation, and Tree Plantings

· Renewable Energy

One story that is circulating, as reported by Reuters - Occidental buys carbon air capture tech firm for $1.1 billion

On Tuesday, Aug 15 (Reuters) - U.S. oil and gas producer Occidental Petroleum (OXY.N) agreed to pay $1.1 billion for technology supplier Carbon Engineering Ltd to help it develop a string of carbon-capture sites it hopes will profit from tackling climate change.

The U.S. oil producer aims to build about 100 plants using direct air capture (DAC) technology that strips carbon dioxide (CO2) from the atmosphere to bury underground or to make products such as concrete and aviation fuel.

Last Friday, the U.S. Department of Energy announced that sites in Texas and Louisiana would get over $1 billion in federal grants. Some of that money will fund Occidental's 30 proposed DAC plants in Kleberg Country, Texas.

The two sites will be first funded by a $3.5 billion authorisation for regional DAC hubs funded by Congress from the bipartisan infrastructure bill.

https://www.reuters.com/markets/deals/occidental-petroleum-buy-carbon-engineering-11-bln-2023-08-15

Sounds good. Let's have another look.

Even the Reuters article mentioned, "The DAC technology is in early stages of commercialisation and will require multibillion-dollar investments to prove it can work economically and generate profits.”

From Mark Jacobson posted on LinkedIn (https://www.linkedin.com/in/mark-jacobson-1b58b38)

Climate Court Victory in Montana Should Lead to Real Solutions, Not Gimmicks

"Four greenwashing technologies include carbon capture and storage or use (CCSU), synthetic direct air carbon capture and storage or use (SDACCSU), blue hydrogen and electro-fuels. CCSU is the capture of CO2 from the exhaust stream of a power plant, factory or other emission source, and the piping of the CO2 to an underground storage facility, an oil field to increase oil production, or a factory to produce fuels (called electro-fuels) that replace liquid transportation fuels. SDACCSU is the same, except the CO2 is extracted from the air. It differs from natural direct air capture, which is photosynthesis that causes plants and trees to grow by naturally removing CO2 and water from the air. Natural removal is fine. Blue hydrogen is the production of hydrogen from fossil gas (also known as natural gas) and then adding usually two sets of carbon capture equipment to capture the CO2 emitted during this process."

"All four technologies actually increase CO2, air pollution, fossil mining and fossil infrastructure. The reason is simple."

https://themessenger.com/opinion/climate-court-victory-in-montana-should-lead-to-real-solutions-not-gimmicks

In another article by Michael Barnard, a similar refutation is made.

“Claiming that we can vacuum CO2 out of the atmosphere to deal with the historical and annual problem is specious nonsense, and then using CO2 to pump more oil to add to the problem is adding insult to injury.”

https://cleantechnica.com/2023/08/16/carbon-engineering-was-always-a-figleaf-for-fossil-fuel-industry-now-its-owned-outright-by-them/

Surely, there is a better way?

Instead of a billion-dollar investment to suspect carbon capture , Occidental Petroleum (Oxy) should invest in renewable energy tech or projects rather than create a lower carbon future. When looking at their website, it looks like a beautiful sustainability story.

https://www.oxy.com/

However, Something smells very fishy here

https://bailoutwatch.org/blog/how-occidental-petroleum-turned-a-government-bailout

:The carbon capture tax credits in the IRA may help existing fossil fuel companies, but they “are expensive distractions from effective action on climate,” Slocum said, explaining that past carbon capture projects have a history of failure that left the public on the hook for billions of dollars. He noted that proposed pipelines and underground storage for carbon threaten the health and safety of communities of color.

To go with these greenwashing pursuits, Oxy has a slick PR campaign called Zero In™, complete with snowy mountain peaks, green fields, and Earth-from-space imagery — all designed to make the company look environmentally responsible. One advertisement says it's taking ‘bold steps’ to innovate for a lower-carbon future.

In an analysis published last week, BailoutWatch found that companies (including Occidental) that claimed billions under tax-code changes in the CARES Act have rocketed past their peers in profitability this year. Of the 150 biggest oil and gas corporations, 48 had posted historic losses they were able to write under the stimulus law, which aimed to ease the economic effects of pandemic shut-downs. These most troubled oil and gas corporations have turned the government bailout and tax write-off into a massive 3,793% increase in profits. “

The way forward - Carbon offsets or Agro offsets

Carbon offsets are a way to compensate for emissions of greenhouse gases by funding projects that reduce emissions elsewhere (ie, sequestration) - companies use them to offset their carbon footprint, which is highly problematic.

How effective is this? Is the carbon offset a price fair? Is this process too complicated?

Mark Carney, the United Nations' special envoy for climate action and finance, has stated, ‘The use of carbon offsets should be a last resort to cover only a small fraction of emissions if the world is to achieve meaningful decarbonisation, according to Mark Carney, the co-chair of the Global Financial Alliance for Net Zero.”

There are a number of problems with carbon offsets, including:

• They can be difficult to verify. It can be hard to ensure that the projects that are being funded are actually reducing emissions, and not just offsetting them.

• They can be expensive. The cost of carbon offsets can be high, which can make them inaccessible to many people.

• They can be unfair. Carbon offsets can create a false sense of environmental responsibility, while allowing polluters to continue emitting greenhouse gases.

So, I am suggesting Agro Offsets into Agro-ecology/Regenerative Agriculture:

Agro offsets are a new type of offset that addresses some of the problems with carbon offsets. Agro offsets are based on the idea of regenerative agriculture, a farming method that builds soil health and sequesters carbon. Regenerative agriculture has a number of environmental benefits, including:

· Reducing greenhouse gas emissions

· Improving water quality

· Increasing biodiversity

· Protecting wildlife habitat

Agro offsets also have a number of social benefits, including:

· Providing jobs in rural areas

· Supporting family farms

· Supporting small farm holders in developing countries

· Promoting food security

In addition to the environmental and social benefits, agro offsets are also more verifiable and affordable than traditional carbon offsets. This makes them a more attractive option for businesses and individuals who are looking to reduce their environmental impact.

Agro Offsets represents the most impactful social investment to support local sustainable and regenerative agriculture.

So, if you are a supermarket, food producer, importer, and active in the food value chain, then is a consideration as part of your ESG story.

If you are a mining company, oil & gas company in developing countries extracting precious minerals, then this is the minimum you can do to give back to the country you exploit.

We, consumers, are also facing higher fresh produce prices and risks in the supply chain – blame it on Russia's invasion of Ukraine war or the climate as this article refers to.

https://www.thegrocer.co.uk/fruit-and-veg/european-heatwave-to-push-up-fruit-and-veg-prices-experts-warn/681697.article

Either way, we need a systems change.

Each country needs to focus on regenerative agro and forest conservation programs. This should be supported by their largest conglomerates., especially those involved in Food, or extraction of critical minerals (mining/oil)

So, in the future, the focus must be on reducing and better using natural resources– waste recycling, energy conservation, renewable energy and green building.

And we should consider a voluntary offset into agricultural projects in developing countries helping small farm holders who continue to live in poverty. I refer to this below.

Agro offsets represent the most significant opportunity for system change.

Call of action

Take the Leap: Choose Agro Offsets for Lasting Impact

Companies of vision, it's time to shift the paradigm. While carbon offsets have their place, Agro Offsets offer a powerful alternative with multifaceted benefits.

Why Agro Offsets?

1. Shared Prosperity: Agro Offsets uplift communities, creating sustainable livelihoods while offsetting emissions. Your investment transforms lives.

2. Economic Growth: Shift from neutral to proactive. Agro Offsets fuel economic growth in developing nations, contributing to broader stability.

3. Environmental Resilience: Agro Offsets promote biodiversity, restore ecosystems, and enhance climate resilience, addressing multiple sustainability dimensions.

4. Empowerment, Not Charity: Agro Offsets empower farmers and local communities, cultivating self-sufficiency and long-term impact.

Join the Movement:

1. ESG Leadership: Elevate your ESG strategy. Agro Offsets showcase tangible social and environmental impact.

2. Tailored Impact: Customize your investment, aligning with your values and brand. Your impact story, uniquely told.

3. Triple Bottom Line: Agro Offsets integrate economic, social, and environmental returns – a true win-win-win.

Let's Connect:

Embrace agro offsets, transcending traditional offsets. Make a mark that matters. Contact us today at jeffrey@upgradingesg.com and shape a sustainable future for all.