Are Offsets a figleaf or fantastic?

A few weeks ago the Government announced that it is developing an innovative “water credits” scheme for Cambridge, to fund water efficiency, water reuse and offsetting. The idea is that this will overturn the Environment Agency’s objections about the lack of water and allow developments to proceed in Cambridge without damaging the Chalk streams.

Although well designed offsetting programmes can be beneficial, as the experience of Carbon Offsets shows, they can also be a fig leaf disguising inaction. For example, investigations have recently shown that over 90% of the rainforest carbon offsets bought through one of the largest certifiers were worthlesss.

Offset scheme are ripe for deception if they’re paying for a nominally “avoided” activity rather than for the more expensive process of actually doing something.

For example, the owner of a forest may claim that they would have cut down the trees, unless someone buys an “offset” from them. It’s often impossible to tell if they would really have cut down the trees or not, and so the scope for dishonesty is clear.

Even if the project is genuinely planting new trees, which is easier to verify, there’s another problem. The carbon emissions may already have happened, but the trees need to grow for decades until they’ve reabsorbed those carbon emissions. This time lag matters, and it also brings an uncertainty. What happens if the newly planted trees die, as we saw along the A14?

And how do you know if the offset is genuinely making a difference? For example, in around 2008, the electricity companies started sending their customers uselessly dim low energy lightbulbs. This was done as part of the CERT scheme, which was a five year obligation on gas and electricity suppliers to reduce carbon emissions in the household sector through energy efficiency improvements. The lightbulbs were deemed to be reducing households’ carbon emissions, but most of them got thrown away!

After complaints, in 2010 the lightbulbs were banned, and the revised scheme worked much better. It resulted in 6.6 million households receiving professionally-installed loft and cavity wall insulation and an estimated 2.8 million households receiving highly subsidised ‘DIY’ loft insulation materials.

Although follow-up studies found that a relatively high proportion of customers would have insulated their homes anyway, after it ended in December 2012, loft insulation rates plummeted by 90%.

If the new “Water Credits” offset scheme develops into a way of funding farmers and landowners to create raingardens or convert to regenerative farming, it could be useful.

However, if the water company starts sending us all “water efficient” shower heads, on the basis that this will be making us all reduce our water use, we, and our chalk streams will be in trouble.