New Internationalist

Carbon Offsets - The Facts

Issue 391

Slicing the carbon pie

The Kyoto Protocol’s Clean Development Mechanism was supposedly created to help finance sustainable development projects in the world’s poorest countries. Many of its supporters argued that it would make it possible for these countries to ‘leapfrog’ or skip the process of industrialization to a more sustainable economic model. But most of the money is going to the largest and most industrialized emerging economies.

Expected average annual carbon credits* from registered projects under the Clean Development Mechanism (CDM) by host country.1

  • The official offsets market (at current average prices for carbon credits) represents approximately $371 million of which nearly 75% goes to just 3 countries – China, Brazil and South Korea.1,2
  • Only 3 countries (Bangladesh, Bhutan, and Nepal) from the UN’s list of 50 Least Developed Countries (LDCs) have registered projects with the Clean Development Mechanism. These amount to 3 biomass and 1 micro-hydro project.1
  • The LDCs’ share of the carbon pie represents approximately 0.33% of Clean Development Mechanism financing or 1.2 million dollars.1
  • Over two-thirds of Clean Development Mechanism projects are initiated from just 3 countries: The Netherlands (35.59%), Britain (20.34%), and Japan (15.25%).1

The Voluntary Offsets Industry

The average price for a tonne of CO2 equivalent from the voluntary offsets market is approximately $1.25 (corporate rates) compared with CDM offsets that cost on average $8.50 per tonne.3 Due to the unregulated nature of the voluntary market there is little reliable data concerning its size. One study suggests that the global voluntary offsets market has grown from just over 1 million tonnes of CO2 equivalent in 2001 to nearly 9.5 million in 2004.3 This puts the voluntary market at close to 20% the size of the official offsets regime of the CDM.

The price of going global, guilt-free

If the science of offsets were as well established as the companies selling them insist they are, then there should be little disparity between their estimates of, for example, a flight’s climate impacts and the remedy.

  • According to Climate Care, an Oxford-based offset company that has a partnership with British Airways and funds projects in the South, a globe-spanning trip flying from London to visit NI offices in Toronto, Christchurch and Adelaide and then returning to London would emit approximately 6 tonnes of CO2 and would cost $85 to offset.4
  • Another British company, the Carbon Neutral Company (favoured by rock stars), says the same trip would produce only 4.3 tonnes of CO2 and would cost just $60, which apparently buys 4 trees in Durham.5
  • An Australian company, Climate Friendly, asserts that the journey emits 11.63 tonnes of CO2 and would cost $195 (US) to offset by financing wind projects.6
  • Finally, Dutch offsetter, Green Seat, has determined that the flight will emit 8.68 tonnes of CO2, and would cost $180 to offset, which apparently buys the required 434 trees in Africa.7


With less than 5% of the world’s population, the US consumes about 25% of the world’s energy resources.8

Don’t be bio-fooled

It is widely believed that trees and other plants act as a carbon ‘sink’, absorbing carbon from the atmosphere. But a number of exhaustive scientific studies have emerged which cast doubt on this basic assertion.

  • Three to four times more carbon is stored in soils than in the vegetation above. 9
  • Scientists concluded that the Kyoto Protocol’s and voluntary offset companies’ promotion of tree-planting projects will enable them ‘to claim carbon credits for the new planting, while in reality releasing huge amounts of CO2 into the air’, since most tree-planting involves clearing of vegetation such as grasses which absorb carbon and exposing the soil.9
  • A six-year study published in Nature assessed the impact of nitrogen depletion in soils. It concluded that rising atmospheric CO2 levels will affect the availability of nitrogen and other nutrients in soils and thus restrict the ability of plant biomass to absorb carbon.10 One of the scientists in charge of the US research team behind the study concluded we ‘cannot rely on nature to clean up’ industrial carbon dioxide emissions.11

Environmental health

A common assumption is that CO2 is a ‘global’ pollutant that does not adversely impact the local environment. However fossil-fuel combustion produces a whole range of toxic ‘co-pollutants’ which do. Carbon offsets and pollution permit trading allow polluters to increase their emissions, which puts communities living nearby at higher risk. According to scientists concerned about public health, ‘the benefits of lowering emissions are immediate’.12 Common pollutants associated with combustion and their known and suspected health effects13:

Toxic Organic Micropollutants – a whole range of substances that, due to their size, can penetrate the lungs easily and cause health problems. Some of their known effects include more frequent asthma attacks, respiratory problems, and premature death.

Sulphur oxides – causes ‘acid rain’ and smog.

Carbon monoxide – interferes with the blood’s ability to carry oxygen to the body’s tissues and results in many adverse health effects including neurological impairment and heart and lung problems.

Nitrogen oxides – can cause lung damage and other respiratory disorders (also causes ‘acid rain’ and smog).

Arsenic – highly toxic; carcinogenic (cancer-causing); many other toxic effects.

Benzene – highly toxic; carcinogenic; disrupts reproductive and neurological systems; anaemia.

Mercury – highly toxic; affects child development; impairs brain function.

Lead – highly toxic, particularly to children; neurological toxicant.

Ozone – lung damage; respiratory impairment.

Polycyclic Organic Matter – carcinogenic and respiratory toxicant.

Formaldehyde – carcinogen; respiratory impairment; asthma inducer.

1,3-Butadiene – carcinogen; neurological impairment; cardiovascular disease.

Renewable revolution?

When the Clean Development Mechanism was proposed in the UN climate negotiations, many campaigners were convinced that it would provide a boon for the core renewable technologies long championed by environmentalists – wind, solar, tidal/wave, geothermal and micro-hydro. However, only 2% of all CDM-sanctioned carbon ‘capital’ goes towards these essential technologies.1 The vast majority of credits generated are the result of a few industrial gas capture projects at major chemical and manufacturing plants that capture HFC – a powerful greenhouse gas.1 Critics argue that these sources should not be paid to clean up a mess of their own making. That these companies are significant polluters in other respects is not factored in to the decision-making process.

Of the 176 registered offset projects with the UN’s climate office, 99 are biomass projects, initiated by industries such as sugar refineries that have huge environmental impacts in other areas.

  • ‘Renewables’ includes wind, solar (heating and photovoltaic), tidal/wave, geothermal and micro-hydro power generation.
  • ‘Bioenergy’ includes projects that use agricultural and animal waste products for fuel as well as gases extracted from organic waste decomposition in landfills.
  • ‘Efficiency’ projects involve some energy-conservation measures and improvements.
  • ‘Dams’, though technically considered to be ‘renewable’, are often highly controversial and have many other damaging impacts on communities and the environment. Micro-hydro projects are generally considered to have few impacts and are therefore included under ‘renewables’.
  • ‘Gas capture’ projects involve major petrochemical and manufacturing plants that have undertaken to not release powerful greenhouse gases into the atmosphere.
  1. UNFCCC,, information current as of 12 May 2006.
  2. Point Carbon,
  3. Sonja Butzengeiger, ‘Voluntary compensation of GHG emissions: Selection criteria and implications for the international climate policy system’, Hamburgishces WeltWirtschafts Institut (HWWI), 2005.
  4. (as of 9 May 2006).
  5. (as of 9 May 2006).
  6. (as of 9 May 2006).
  7. (as of 9 May 2006).
  8. US Energy Information Administration,
  9. As quoted in Fred Pearce, ‘Tree farms won’t halt climate change’, New Scientist, October 2002.
  10. Peter B Reich, Sarah E Hobbie, Tali Lee, David S Ellsworth, Jason B West, David Tilman, Johannes M H Knops, Shahid Naeem & Jared Trost, ‘Nitrogen limitation constrains sustainability of ecosystem response to CO2’, Nature, Vol 440, 13 April 2006.
  11. As quoted in Catherine Brahic, ‘Planting trees “will not cancel out climate change”’, SciDev.Net, 13 April 2006.
  12. George Thurston, associate professor of environmental medicine at the New York University School of Medicine as quoted in Aparna Surendran, ‘Fossil Fuel Cuts Would Reduce Early Deaths, Illness, Study Says’, Los Angeles Times, 17 August 2001.
  13. Agency for Toxic Substances and Disease Registry (ATSDR),; Toxnet Toxicology Data Network, United States National Library of Medicine,; US Environmental Protection Agency,; Scorecard,

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  1. #2 Shamus Joy 27 Aug 12

    Industrial giants have taken the lions share of saleable CDM credits. They have an advantage of superior organisational depth and access to capital which mountain village communities lack even though the reforestation of mountain areas would yield many extra benefits in the form of protection of the hydrological cycle through cloud seeding.A third of humanity depends on the rivers which issue from the Himalayan mountain range and Tibetan plateau.The extra resources available to these
    communities would generate directly usable commodities, (biomass,fodder,craft materials edible fungi shade and building materials), reducing or halting the drift to the cities

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This article was originally published in issue 391

New Internationalist Magazine issue 391
Issue 391

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