Decarbonization & Insetting vs Offsetting

The beautiful elephant in the room and an unexpected personal reflection on the emotional state of the environmental movement

The article below started as a reflection on a very wonky subject of the decarbonization, insetting and offsetting discussions of late. Perhaps it is the political climate in the US the past week or two, but I found myself flowing towards a reflection on the emotional state of the broader environmental movement and our responsibility for the connection between our own heart and mind and how that might play into changing others hearts and minds.

I hope reading this helps provide clarity on multiple fronts for you as much as writing it did for me.

The elephant in the climate accounting and claims room

In the last couple of years, I’ve seen a significant rise in the criticisms of the integrity of beyond value chain mitigation activities, primarily carbon credits. Some of that criticism is very fair and there are legitimate steps that need to be taken to reduce the likelihood that a beyond value chain mitigation outcome accurately represents a climate mitigation outcome.

And I want to be very clear up front that I am fully behind the decarbonization first requirement, with the use of beyond value chain mitigation to compensate for historical and residual emissions that cannot realistically be reduced.

Critics of beyond value chain mitigation largely argue that it is a license to pollute (even if it is used after rigid rules around decarbonization first). And central to that argument is that a beyond value chain mitigation outcome does not represent 1 tCO2eq removed or avoided and should not be used for any form of compensation or sometimes even contribution.

Now one question has been keeping me up at night. Why do we have such a high standard for validation/verification and the integrity of offsets and have such a low standard for the validation/verification and integrity of greenhouse gas emissions accounting and insetting?

I don’t have studies and research to back up the anecdotal evidence that I’m about to share, so please take these reflections with a grain of salt.

From my discussions with consulting firms that support corporate greenhouse gas emissions inventories, their estimate is that there is upwards of 30% error in those quantifications across scopes 1, 2 and 3 relative to the true emissions due to the vast number of assumptions made in producing those inventories. Furthermore, that error likely significantly increases for companies that have diverse supply chains and is likely greater for companies that are largely AFOLU operations (agriculture, forestry and other land uses).

And perhaps most surprisingly, only a handful of corporates actually have their GHG inventories validated by 3rd parties. The vast majority of corporates submit their GHG inventories to SBTi, and those inventories are assessed to ensure that the corporate has covered all of their likely emissions sources, but not rigorously assessed/verified for the accuracy of the inventory itself.

On insetting, I’ve seen many call for a shift from beyond value chain mitigation to insetting, which is essentially the same thing as decarbonization in most cases. From an accounting perspective, insetting is a corporate reducing their emissions within their value chain regardless of whether it is a removal or an avoided emission. And currently, there is no validation/verification of insetting activities as far as I am aware of although groups like The AIM Platform are beginning to work to address this.

So my question to all of us, is, why are we spending so much of our collective energy critiquing the integrity beyond value chain mitigation outcomes, which actually have far more 3rd party validation and verification than GHG inventories and insetting climate mitigation outcomes?

Shouldn’t we at least be asking the same level of rigor for GHG inventories and insetting as we are of beyond value chain mitigation and offsetting if we are taking a like for like approach?

And if it’s too complicated and costly to reduce the error in GHG inventories to zero, ie the emissions ledger has error, then should we not have a claims structure that has built in buffer and allows for error and high-integrity without requiring perfection in measurement?

Today, we do not have perfect data and additionality, leakage and permanence in both climate mitigation and nature compensation mechanisms are evolving concepts.

There is likely error in both the emissions/insetting ledger and the beyond value chain mitigation ledger. And I’m not saying we shouldn’t be working hard to reduce that error, but should we shut down all activity until we have reduced that error to zero?

Some are calling for the pausing of beyond value chain mitigation until the error is zero, should we be pausing all corporate decarbonization initiatives until we have perfected GHG inventory methodologies?

I would rather not.

Instead of the black and white approach to private sector climate mitigation, is there a middle path where we can require a high-level of decarbonization among corporates while recognizing that GHG inventory accounting is not perfect, but at least be conservative in our estimates? And use beyond value chain mitigation to compensate for historical and residual emissions that cannot realistically be abated while recognizing that every carbon credit will not be perfect, but at least be conservative in our estimates?

What if, instead of building a system designed for perfection on both sides of the ledger, we accept the reality that there is and will likely continue to be error in quantification in both GHG inventories (insetting included) and beyond value chain mitigation (largely carbon credits)?

What if we built buffers and margins into claims so that, if mistakes are made in accounting, which they inevitably will be made, we will still have high integrity accounting and high integrity claims?

Because at the end of the day.

Integrity isn’t perfection.

Integrity is being honest about the current state of measurement and quantification.

Integrity is being truthful about shortcomings that exist in today’s methodologies and accounting tools.

Integrity is factoring existing shortcomings into claims that represent the nuanced situation that is our current accounting reality.

The interplay between the heart and the head of the environmental movement

You might have sensed a bit more emotion and anecdotal evidence in this reflection than my normal writing. I sadly didn’t have the time to do extensive research to back up my anecdotal evidence, but felt called to share these reflections nonetheless.

Part of this motivation I believe is somewhat triggered by the political climate in the US. There is more polarity then there has ever been in my lifetime and it feels like we are reaching a breaking point. But I have hope that we can unite, that we can recognize that no one is perfect and we can, at least for some people, assume best intention.

I believe that a certain amount of criticism and recognition of how we can do better within the climate and nature movements is incredibly healthy and necessary, but at a certain point, if it leads to gridlock and distain within our own movement, how can we even begin to imagine bridging larger philosophical divides and uniting the entire world to address the climate and nature crises we face?

This is a call to come together to find the middle path.

To recognize that we as individuals are not perfect and our systems are not and will not be perfect either. This is a call to recognize the humanity in each of us and critique constructively with a shared intention to make progress and bringing solutions and suggestions alongside of critique. If we do this, we have a chance.

Recognize that we each have a head and a heart. If I find yourself critiquing, it usually comes from the pain I are feeling in your heart, but it is manifesting itself in my head and wanting others to share in that pain. When I find yourself critiquing, I try to step back into the heartspace and ask myself how can I be constructive in this moment? How can I put my ego aside and contribute to collective progress?

From the little interactions we have with others in meetings to the large discussions about what is the best way to make progress, my hope is that we recognize that the passion we see today even when we do have different perspectives just shows our shared commitment to solving these existential crises. I hope we channel that energy to not try to solve everything today, but recognize where we can make progress while still holding that north star close to our hearts and having it guide the way.

I’m doing my best, you’re doing your best.

Let’s try to have a bit more compassion for ourselves.

And let’s try to have a bit more compassion and openness to the ideas of others to find a functional middle path to make united forward progress.