11/10/2023
Insetting may not be any better than offsetting, says carbon credit integrity expert
Many companies are looking for ways to reduce their carbon footprint and support climate action. Carbon credits may be categorized whether they are generated from projects inside or outside the company's value chain.
Insetting means that the company invests in emission reduction or removal projects that are directly linked to its own activities, such as suppliers, customers, or operations.
Offsetting means that the company invests in projects that are unrelated to its value chain, such as renewable energy or forest conservation.
Some of the pros and cons are:
- Insetting can help companies align their sustainability goals with their core business strategy, engage their stakeholders, improve their reputation, and create value along their value chain. However, insetting can also be more complex, costly, and risky than offsetting, as it requires more involvement and coordination from the company and its partners. In addition, insetting may not always lead to additional emission reductions or removals, as some projects may have happened anyway without the company's intervention.
- Offsetting can help companies achieve their emission reduction or removal targets faster, cheaper, and easier than insetting, as they can choose from a wide range of available and verified projects around the world. However, offsetting can also be seen as a way of avoiding responsibility or greenwashing, as it does not address the root causes of the company's emissions. Moreover, offsetting may not always deliver the expected environmental and social benefits, as some projects may face leakage, reversal, or double-counting issues.
Companies should follow best practices such as:
- Setting science-based emission reduction targets and prioritizing direct action to reduce their own emissions before investing in carbon credits.
- Choosing high-quality carbon credits that are certified by reputable standards and registries, and that demonstrate additionality, permanence, verifiability, and co-benefits.
- Reporting transparently on their carbon credit purchases and retirements, and avoiding double claiming or double counting of emission reductions or removals.
- Engaging with their stakeholders and communicating clearly on their carbon credit strategy and impact.
In conclusion, insetting is not inherently better than offsetting, and both approaches require rigorous standards and safeguards to ensure their environmental integrity and effectiveness. Companies should not rely on insetting alone to achieve their climate goals but rather use it as one of the many tools available to reduce their emissions and support sustainable development.
Reference article titled "Insetting may not be any better than offsetting, says carbon credit integrity expert"
Published July 7, 2023 at Carbon Pulse
By Ben Garside
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