Carbon offsetting: still a right to pollute?

Why carbon offsetting has often been seen as a right to pollute

Since its introduction with the Kyoto Protocol at the end of the 1990s, the principle of carbon offsetting for businesses has caused a lot of talk and has often been decried. Indeed, as the excellent article remind s us by Pierre Breteau and Gary Dagorn published in Le Monde in 2019, very few offset projects manage to justify the sacrosanct pillars necessary for their effectiveness:

• Provide new financing (principle of additionality in relation to already existing capacities),

• Assess the actual quantity of CO2 avoided thanks to the project,

• Carry out verification audits of the said avoided CO2 emissions,

• Guarantee the uniqueness of the carbon credits issued by the program (one ton of CO2 transformed once into a carbon credit)

And without this sesame, it is the whole usefulness of the system that is called into question, and the specter of a right to pollute that is looming for companies that can offset their CO2 emissions without guaranteeing the quantity of emissions. actually avoided, and without the need to make special efforts on their own emissions.

A sense of the right to pollute reinforced by compensation frameworks that do not solve the basic problems

The question of the right to pollute has been present for 20 years, because questions about the fundamentals of carbon projects have never been completely resolved. And even new frameworks like the Low Carbon Label launched in France in 2019 by the Ministry of Ecological Transition do not bring no satisfactory answers.

Indeed, in the case of field crops, the Low Carbon Label is based on the principle of carbon storage in the soil. Without mentioning the question of the relevance of this additional financing for farmers from private companies, an eminently political subject, we can on the other hand affirm that the methods for calculating the quantity of CO2 avoided are certainly not representative of the situation. real. Why ? Because, for economic reasons, it will not be possible to measure the quantity of carbon actually stored in the soil by sampling, and it will therefore be necessary to go through modeling, with its share of uncertainties. Contrary to the simple calculation of the gain linked to the reduction in consumption of a fossil energy, the modeling of living organisms, combined with the effects of the weather, will not provide models representative of the real situation. A vagueness among many others, which can only raise suspicions about the real scope of such a device.

But despite these shortcomings, can we see carbon offsetting mechanisms as simple rights to pollute? Obviously not, because companies achieving their carbon neutrality via offsetting without improving their own level of emissions will face serious problems of profitability and the right to operate in a context of climate change that is much more marked than at the end of the 90s.

The right to pollute no longer exists because all of a company's activity is exposed to climate change

According to Metigate, the re al issue for companies is not to balance their carbon emissions via offsetting, but to develop their resilience to climate change. And offsetting their CO2 emissions is only a small part of the huge task ahead of them. Planting trees will not solve their fundamental problems.

The real challenge for a company is to maintain its profitability and its right to practice in a context of climate change. Beyond an improved carbon footprint through offsetting, the exposure of its costs and its turnover to a 2030 or 2050 climate, as well as the implicit agreement of the stakeholders (population, shareholders, customers, etc.) to continue to carry out its activity are the real difficulties to overcome.

For example, an agribusiness company will be exposed to increased agricultural raw material costs due to yield declines, increased energy costs, tighter restrictions on water abstraction, increased taxes related to its waste (REP tax), high er transport costs, or even possibly a decrease in purchase intention for its products, less suited to a new demand. In the end , according to our estimates, the drop in profitability linked to the increase in the carbon tax, and therefore to the final balance of the company's carbon emissions after offsetting, represents only 5% of the total exposure. from its profitability to climate change.

It is therefore easy to understand that a company that relies only on carbon offsetting to green its business would quickly find itself overwhelmed by an explosion in its other costs and a probable deterioration in its turnover, leading to its loss.

The shortcut between carbon offsetting and the right to pollute is quite caricatural. No company will be able to solve its fundamental climate resilience problems through offsetting, and none of them can see this mechanism as the magic bullet. Carbon offsetting is a decoy for companies. The concrete impact of climate change on profitability and the right to exercise companies is the unstoppable safeguard to prevent carbon offsetting from being a simple right to pollute. However, it is not without interest in contributing to the financing of carbon sink projects and taking advantage of an image benefit to strengthen a company's right to practice in a context of transition to a carbon-free economy.