The first project on carbon offsetting took place in 1989. The project was undertaken by Applied Energy Services where commitment to plant 50 million trees were made in Guatemala. In exchange, consent to construct a power station fired by coal would be granted (Smith, 2007, p. 14). Nonetheless, it took companies such as Carbon Neutral and Climate Career Companies to establish a retail sector in carbon offsetting in 1998 in Britain. The first airline in the world to become a carbon neutral airline was Nature Air in 2004. The airline devoted itself to conservation and management of tropical rainforests in Costa Rica. The Nature Air airline began to offer full compensation arising from carbon emissions that were released from its flight operations. The airline achieved this by offering local compensation programs that were recognized by the government and also international auditors. This initiative helped to fund conservation and reforestation programs in the whole of Costa Rica.
In 2007, the British Airways carried out a foot printing exercise which identified 17.7 million tons of CO2 emissions. About 95% emissions arose from aircraft. Goals were then set up to help reduce these CO2 emissions by half by 2050. In addition, it was recommended that carbon emissions would be reduced from 110 grams of CO2 per kilometer in 2005 to 83 grams of CO2 per kilometer in 2025.
Currently, there are about 232 retailers, brokers, and consultants among others that offer carbon offsetting services and about 232 business establishments (ENDS carbon offsets, 2011). According to IATA, over 30 airlines in the world provide carbon offsetting services. Airlines all over the world understand that carbon offsetting is the most viable solution to addressing challenges posed by climate change. The passengers using airlines have been encouraged to engage themselves in projects that promote carbon reduction hence offsetting carbon emissions generated during a given journey (IATA).
Literature review
Aircraft use fossil fuels as the source of energy. Fossil fuels are burnt during combustion to generate CO2 which is one of the greenhouse gases that contribute to climate change. Climate change creates numerous adverse effects such as extreme weather events and depletion of ozone level. These impacts of climate change have influenced the aviation industry to adopt emission trading schemes (the Guardian).
With carbon offsetting, emitted CO2 is calculated and then a project that is intended to minimize the carbon emissions by the same amount is funded. This project is meant to neutralize the emissions that have been released. A carbon offset is best achieved through renewable energy projects as opposed to using of biomass. Biomass projects utilize a lot of space and people may be tempted to fell trees in order to get biomass that can be used to generate agricultural wastes that in turn are used to produce biogas. Carbon offsets are meant to counter carbon emissions that are generated by one area, for instance, flight, through investment in projects from another area. The airlines invest in projects such as green energy, tree planting, and improving energy efficiency. Carbon neutral entails estimation of carbon emissions and buying of a carbon offset which helps in meeting the costs associated with planting trees or green sources of energy such wind and solar power. The annual awards held by New Oxford American University adopted Carbon Neutral as the “Word of the Year” (Oxford University Press, 2006).
Measures such as improvement in air technology, operations, and infrastructure; and use of alternative fuels are being developed with a purpose of combating CO2 emissions. In addition, global market-based measures abbreviated as GMBM are also planned. GMBM is a scheme that aims at introducing more measures to offset carbon emissions without introducing economic measures that are inappropriate. These measures seek to encourage investment in projects that reduce carbon emissions elsewhere. Airlines, therefore, will be required to purchase carbon credits emanating from other industries in order to neutralize the growth in their carbon emissions. There are also efforts by ICAO to maintain net emission by international aviation in 2020 described as carbon-neutral growth. These net emissions will be maintained beyond 2020 (CAPA). Carbon neutral growths are meant to foster reduction of emissions based on sectors as opposed to reductions focused on the percentage of emissions released depending on the growth curve of a specific industry. Total reduction of emissions can be achieved when efficiency on flight routes and air traffic are improved. Therefore, airlines should focus on immediate and planned emissions generated at a specific sector by checking the growth of the sector.
There are two types of markets in carbon offsetting: mandatory and voluntary markets. The mandatory markets are operated under cap and trade system and operate under Kyoto Protocol and EU Emissions Trading Scheme (ETS). The mandatory markets have an upper limit on emissions. Licenses to emit are allocated to the interested buyers. Significant reduction of emissions is achieved when the caps are strict. Voluntary markets do not operate through cap and trade regime. They have no mandatory obligation to act. Instead, they opt to reduce carbon emissions based on their environmental consciousness or in other cases, to create a good reputation for their company. Both mandatory and voluntary markets are project-based when they adopt measures that are meant to lower emissions directly. Project-based transactions can be conducted within or without Kyoto Protocol is based on voluntary markets (UNFCC).
Annex 1 countries (developed nations) are permitted under Kyoto Protocol to participate in carbon trading (UNFCC). Projects falling under Clean Development Mechanisms create Certified Emission Reduction (1 ton of CO2) are meant to eliminate CO2 emissions from the atmosphere or prevent such emissions from being released from the atmosphere by supporting projects from Annex 2 nations (developing nations). However, airlines are not obligated under Kyoto Protocol to request for carbon credits by surrendering Certified Emission Reductions (CERs). It is possible, however, that airlines can provide CERs to their clients who are able to offset carbon emissions on their behalf. CERs can be purchased or sold at the market voluntarily. The Clean Development Mechanism was banned in 2013 despite the fact that the mechanism helped to destroy HFC-23 gas after it was known that the plants would create more of the gas in order to receive payments which were unethical.
Apart from CERs, there is Verified Emission Reductions (VERs) which are projects that utilize a wide variety of technologies. Most of the Verified Emission Reductions are sold in voluntary markets. VERs lack proper screening and are not verifiable under the Kyoto Protocol (World Watch Institute). This makes it extremely difficult to know whether meaning emission reductions are being achieved. Due to lack of regulation especially from a country such as the United States which is not one of the nation’s bound by Kyoto Protocol, makes VERs lack accountability.
References
UNFCC. Kyoto Protocol. Retrieved Apr. 28, 2018, from https://unfccc.int/process/the-kyoto-protocol
Smith, K., 2007. The Carbon Neutral Myth: offset indulgences for your climate sins. Carbon Trade Watch. Amsterdam: Transnational Institute. Accessed: 28th Apr. 2018, from www.carbontradewatch.org/pubs/carbon_neutral_myth.pdf
NatureAir., 2011. Why Fly Nature Air? Accessed: 28th Apr. 2018 from http://www.natureair.com/why-fly-nature-air-costa-rica.aspx#item1
Oxford University Press., 2006. Carbon Neutral: Oxford Word of the Year. Oxford University Press blog. Accessed: 28th Apr. 2018, from http://blog.oup.com/2006/11/carbon_neutral_/
IATA. Carbon Offset Program. Retrieved Apr. 28, 2018, from http://www.iata.org/whatwedo/environment/Pages/carbon-offset.aspx
ENDS carbon offsets., 2011. The ENDS Carbon Offset Providers Directory. Accessed 28th Apr. 2018 from http://www.endscarbonoffsets.com/directory/
The Guardian. Carbon offsetting and the aviation industry. Retrieved Apr. 28, 2018, from https://www.theguardian.com/environment/lastminutecarbonwise/story/0,,2013995,00.html
CAPA. Global aviation agrees a carbon offset scheme at ICAO's Assembly - but leaves much work to be done. Retrieved Apr. 28, 2018, from https://centreforaviation.com/insights/analysis/global-aviation-agrees-a-carbon-offset-scheme-at-icaos-assembly---but-leaves-much-work-to-be-done-306508
World Watch Institute. Carbon Offsets 101. Retrieved Apr. 28, 2018, from
http://www.worldwatch.org/node/5134
