An agricultural biogas scheme, funded by offsetting. Image: South Pole
Starting in January 2017, World Economic Forum Annual Meetings have been climate neutral. It’s part of our commitment to building a cohesive and sustainable world for future generations. Our sustainability policy, which was recognized in 2018 with the ISO 20121 international standard for sustainable event management, is based on reducing emissions related to the meeting as much as we can and offsetting the rest through investments in solutions that mitigate climate change and support those who are hardest hit by the impacts of it. But how does offsetting actually work?
It’s all about carbon credits
The unit of currency for offsetting is the carbon credit. Each carbon credit is tradeable and represents one tonne of carbon removed from the atmosphere. In our case, we measure both emissions directly related to the meeting itself such as emissions from heating, decoration, catering, lighting and ground transport, as well as indirect emissions, such as participants’ travel to and from the meeting. We then buy enough carbon credits to directly offset all residual emissions. The certified carbon credits we purchase support climate action projects such as renewable energy, energy efficiency, climate-smart agriculture and forest conservation that lead to real, quantifiable emission reductions.
Climate action projects can reduce greenhouse gases - GHGs - in the atmosphere in three ways. The first is by replacing fossil fuel-derived energy with energy from renewable sources. The second is to sequester carbon from the atmosphere by, for example, planting trees or encouraging more wetlands or other natural ‘carbon sinks’. The third captures and destroys emissions by, for example, capturing methane gas from wastewater.
Another way of looking at carbon credits is that, in addition to helping close our emissions gap, they also help close the finance gap that exists for helping get low-carbon technologies off the ground.
What makes a climate action project?
The development of these climate action projects consists of more than merely calculating their CO2 emissions reduction potential. Strict international rules define the methodologies and boundaries of climate action projects. They also help ensure that emission reductions claimed by projects are real, verified, permanent and ‘additional’ to what would occur in a ‘business as usual’ scenario.
These rules and processes are laid down by internationally recognised third-party standards, such as the Gold Standard, Verra's Verified Carbon Standard (VCS), and the Clean Development Mechanism (CDM) managed by the UNFCCC. Other standards, such as Social Carbon, and Climate, Community and Biodiversity Standards (CCBS) measure the social co-benefits of projects and are used in association with the VCS.
What’s the World Economic Forum doing about climate change?
Tracking is key
Certified carbon credits only get issued if the corresponding emission reductions have been monitored and evaluated. Monitoring consists of the ex-post quantification of the emission reductions over a certain period of time, summarized in a monitoring report. Verification is the audit of the monitoring report, performed by a third-party auditor that determines the final number of credits that can be issued. The project standards employed by South Pole, which the Forum works with, require that projects are verified by auditors who must conduct site visits: every aspect of the project’s design – environmental and social – undergoes thorough scrutiny both from the outset and subsequently for every issuance of carbon credits over the entire lifetime of the project. South Pole also regularly visits each project to monitor progress and provide support.
How do we select our carbon credits investments?
Since 2017, we’ve opted for a portfolio that provides diversity in terms of geography and uses. With the help of the company South Pole, we’ve made sure that each project positively benefits workers, doesn’t carry any negative social or environmental impacts and only involves responsible actors. Schemes we have invested in have included replacing inefficient cook stoves in Africa and India, sustainable production of rubber, akai and nuts in Brazil’s Jacunda Forest, and promoting biogas in Switzerland, also avoiding CO2 emissions in the host country to the Annual Meeting. See here for more information on our specific offset investments. For 2020, in keeping with our corporate strategy our investments will be focused on natural climate solutions that increase Earth’s ability to store carbon in forests.
Does offsetting work?
Voluntary purchase of carbon credits has so far reduced the amount of GHGs in the atmosphere by more than 1 billion tonnes. This is the equivalent of taking around 213,000,000 passenger vehicles driven for one year. But offsetting can only be an effective solution if it is used in conjunction with an ambitious emission reduction strategy: credits are neither a quick fix nor a licence to continue business as usual. The encouraging news is that data shows that carbon credit buyers slashed their direct emissions by almost 17%, while non-buyers only reduced emissions by less than 5%. Companies that purchase carbon credits are also five times more likely to internally price carbon, and twice as likely to have a dedicated budget for low-carbon R&D.
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The views expressed in this article are those of the author alone and not the World Economic Forum.