Firms abandon carbon offsets
keen to address their environmental impact, are becoming the latest casualty of
the recession.
two months of this year compared with the last two months of 2008, according to
the environmental research firm New Energy Finance. The price of these credits
also suffered, falling 30%.
to move forward in the present economic climate," said Jon Williams of accountants
Price Waterhouse Coopers.
of communities in developing nations – replacing cooking stoves or providing solar
panels to rural villages without electricity, for example.
they fitted with their broader pledges on corporate social responsibility. But
carbon-credit retailers say feel-good projects could be the most affected by the
economic downturn, as companies concentrate on projects that have the biggest
environmental impact.
such as wind and hydro, where the cost per tonne of emission reductions is less,"
said Neil Braun, chief executive of the Carbon Neutral Company, a carbon-credit
retailer.
which will come into effect in April 2010, is also dampening interest in carbon
offsetting. Under the scheme, about 20,000 British firms will be required to buy
energy allowances. The government’s aim is to save 4m tonnes of carbon dioxide
a year by 2020, but companies question whether they should buy carbon offsets
as well.
A report due to be released next month by the CDP will show that corporate investment
in energy efficiency is rising during the recession as companies look for cost
and carbon savings they can actually measure.
director of J Sainsbury. "It just passes the problem to a third party. It makes
more sense to focus on energy efficiency, where there are clear economic and environmental
savings." Sainsbury offset the emissions linked to the construction of a new building
two years ago. "It only reinforced our belief that energy reduction is a more
efficient way to spend our money, " said Sachdev.
"Offsets would only be considered as a last resort for emissions that we cannot
eliminate in any other way – and we anticipate that these instances will be rare,"
said a spokesman.
emission reductions. Several firms register projects whose credits are sold on
the voluntary market, but the most widely accepted offset standards are the Gold
Standard and VCS.
20% premium for the projects it certifies, said more firms are now pledging that
a certain proportion of their offset portfolios will include Gold Standard credits
to ensure their investments are credible.
This has caused a lot of speculation about whether the pay-to-pollute method has
any real impact on carbon reductions. Ed Matthew, Friends of the Earth’s head
of UK climate, said there is an upside to the fallout in the offset market. "It’s
great that more companies are reaping the rewards of making their buildings energy
efficient rather than falling for the false solution of offsetting."