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This is the pre-peer reviewed version of the following article: Hyams, K. and Fawcett, T. (2013) The ethics of
carbon offsetting. Wiley Interdisciplinary Reviews: Climate Change.
The Ethics of Carbon Offsetting
Keith Hyams and Tina Fawcett
Carbon offsetting can be loosely characterised as a mechanism by which an organisation or individual
contributes to a scheme projected to deliver carbon emission reductions on the part of others, and
thereby claims responsibility for the reduction themselves. The term ‘offsetting’ is used because such
contributions are used to balance out some or all of the organisation or individual’s own carbon
emissions, so as not to exceed, in total, some ethical or legally imposed emission limit.
The usefulness of carbon offsetting as an approach to tackling climate change is hotly contested. The
United Nations, which has created and governs the major global mechanism for generating and
validating carbon offsets, the Clean Development Mechanism (CDM), states that it “stimulates
sustainable development and emissions reductions, while giving industrialised countries some
flexibility in how they meet their emission reduction limitation targets.”1 Critics make very different
claims, for example: “Carbon offsets are at best a distraction and at worst a grandiose carbon
laundering scheme.”2; “Carbon offsetting is without scientific legitimacy and is dangerously
misleading”3.
Arguments about the ethics and effectiveness of carbon offsetting have ranged across the science of
carbon emissions, abatement technologies, economics, politics, international relations and philosophy.
It is a topic which has divided the environmental movement. Some environmental organisations are
actively involved in supporting carbon offsetting, whereas others reject its use entirely. For example,
WWF founded and continues to support the ‘Gold Standard’, a ‘best practice methodology and high
quality carbon credit label for both Kyoto and voluntary markets’, which is also supported by 80 other
NGOs worldwide4. Likewise, Forum for the Future, a UK sustainable development charity, works on
BP’s ‘Target Neutral’ carbon offsetting scheme, which includes a number of prominent
environmentalists such as Jonathon Porritt on its advisory panel5. On the other hand, Friends of the
Earth has published a very critical report which rejects all forms of carbon offsetting6, and
environmental campaigner and author George Monbiot has dismissed carbon offsets as a means of
making substantial cuts to net greenhouse gas emissions7,8.
In what follows, we begin by discussing in more detail the nature of carbon offsetting, highlighting
key differences between the compliance and the voluntary market for carbon offsets. We then seek to
expose some of the underlying reasons for the ethical disagreements described above. We will show
that these disagreements relate both to empirical disagreements about what the likely benefits of
offsetting are, and, more fundamentally, to principled disagreements about the right way to discharge
duties to deliver carbon reductions.
1. Regulated versus voluntary offsetting
Carbon offsetting comes in two forms – regulated or compliance offsetting, and voluntary offsetting.
While there are important differences between these types of offset (Table 1 below) they nevertheless
co-evolved from a common base in the 1990s, and are linked in a number of ways, not least the fact
that a growing number of companies sell both compliance and voluntary offsets9.
Regulated carbon offsetting emerged as a small-scale experimental idea agreed at the Kyoto Protocol
talks in 1997. It was intended to give developed countries some flexibility in meeting their legally-
binding carbon reduction targets. The key arguments in favour of regulated offsetting were that it
would:
•Be an economically efficient way of making carbon cuts globally
•Transfer money from richer to poorer countries
This is the pre-peer reviewed version of the following article: Hyams, K. and Fawcett, T. (2013) The ethics of
carbon offsetting. Wiley Interdisciplinary Reviews: Climate Change.
•Help with technology transfer and development in poorer countries6.
The two mechanisms by which offsetting can occur under the Kyoto Protocol are the Clean
Development Mechanism (CDM) and Joint Implementation (JI). The most important difference
between these schemes is that CDM schemes operate in developing countries and JI schemes in
developed countries (primarily in Eastern Europe). CDM is much the bigger scheme, accounting for
90% of all offset project transaction volumes10. Although carbon offsets were initially supposed to be
a ‘supplementary’ measure, according to the Kyoto Treaty, they have now become a dominant
component in international action to reduce carbon emissions. Within the EUETS scheme, during
Phase II (2008-2012), the UK was allowed to use CDM/JI credits to meet around two-thirds of its
national savings target, and the percentage allowed on average across the EU was even higher11. The
EU has tightened the rules on use of CDM for Phase III (2012-2020), so that a maximum of 50% of
required savings are met through offsets. The World Bank12 suggests that to date CDM and JI have
reduced over 600 MtCO2e of emissions, which is more than the total annual emissions from the UK
economy, and may achieve emissions reductions of the order of 3,300 MtCO2e by 2020.
Voluntary carbon offsets are, by contrast, purchased by organisations and individuals who wish to
offset their emissions for reasons other than external compulsion. Just 1.3% of voluntary carbon
offsets were bought by individuals in 2011, the vast majority being bought by organisations, primarily
corporations13. Survey information indicates that voluntary offsets are most usually purchased for
ethical or corporate social responsibility reasons14. A ‘carbon management hierarchy’ is quoted in
government advice on voluntary carbon offsetting15 and by companies selling carbon offsets16. The
hierarchy suggests that carbon offsets should only be used as a last step, when the options for
avoiding, then reducing emissions, and then substituting lower carbon options have been exhausted.
Yet it seems unlikely that most purchasers of voluntary carbon offsets have followed the hierarchy.
For individuals, carbon offsets are often sold in conjunction with avoidable high carbon activities
such as flights, which suggests a lack of attention to the carbon hierarchy. And in the case of
organisations, in a survey of over 1,600 environmental management practitioners, 44% of respondents
were concerned that offsetting could distract attention from reducing greenhouse gases at source17. A
useful summary of many of the arguments around voluntary offsets can be found in a report by the
UK House of Commons Environmental Audit Committee18.
Table 1: Summary characteristics of compliance and voluntary carbon offset markets
Compliance Voluntary
Origin Established under the Kyoto
Protocol in 1997.
Developed by businesses and
NGOs since the early 1990s.
Schemes CDM – Clean Development
Mechanism & JI – Joint
Implementation
Hundreds of organisations operate
in this market, with a number of
competing standards and
verification schemes.
Activities undertaken to
generate offsets
Largely abatement of industrial
greenhouse gases19.
Note: This is highly influenced by
EUETS rules which do not allow
inclusion of offsets from forestry
or agricultural projects.
Varies considerably year to year.
In 2010, dominated by forest
carbon credits (45%) followed by
methane capture (18%) with little
activity in renewable energy &
energy efficiency * In 2011,
renewable energy accounted for
45% of transactions, followed by
forestry.**
Regions from which
offsets originate
Primarily China and India19 Varies year by year. 2010: North
America (35%), Latin America
(28%), Asia (17%), Africa (4%) *
2011: North America was still the
This is the pre-peer reviewed version of the following article: Hyams, K. and Fawcett, T. (2013) The ethics of
carbon offsetting. Wiley Interdisciplinary Reviews: Climate Change.
biggest source, but Asian offsets
increased considerably.**
Types of purchaser Organisations with legally-
binding carbon reduction targets
to meet, primarily European
organisations within EUETS.
Organisations (98.7%) and
individuals (1.3%) primarily in
Europe and the US. **
Offset carbon traded in
2011 (MtCO2e)a **
291
(CDM, primary transactions only)
95
Future expectations Considerable uncertainty, due to
lack of successor to Kyoto
Protocol and new EUETS rules.
Growth to continue.
Sources: * figures for 2010 from Reference 14 ** figures for 2011 from Reference 13
Note: all percentage figures are by volume, i.e. tonnes of CO2, not by value
2. Scientific legitimacy and carbon accounting
Two key sets of ethical concerns about carbon offsetting relate to, first, issues of scientific legitimacy,
and second, issues of carbon accounting such as additionality.
Scientific debates are generally centred on projects in agriculture or forestry, most of which are sold
as voluntary offsets. To take tree planting as an example, many doubts have been raised about the
quality of evidence on rates of carbon sequestration by trees and how this varies over time and by
species, the security of savings, the risk to plantations from disease, fire and so on– in addition to
broader ethical issues around what the trees are replacing, whose land it is and what happens to local
people’s rights18. While important, these arguments only apply to a particular class of project and do
not dominate the wider debate.
In the case of carbon accounting, a report into the integrity of the Clean Development Mechanism for
the European Commission20 identified the following six issues for detailed investigation: baselines
setting and additionality testing; CDM governance; competitiveness distortion and carbon leakage;
technology transfer; sustainable development; political lock-in. Of these, ‘baselines setting and
additionality testing’ was identified as perhaps the most controversial aspect of CDM, and this issue is
widely cited as problematic in the literature on all types of offsetting. To ask whether an offsetting
project is additional is to ask whether the emission reductions that it achieves would have occurred
anyway, even if there had been no intervention in the form of an offsetting project. Since the question
engages counterfactuals – an estimate of what would have happened in the absence of the carbon
offset funding (‘baseline setting’) – it is inherently problematic. There have been very powerful
critiques of the flaws, in practice, of estimates of additionality6. Authors have drawn parallels with
experience under other carbon trading schemes. Spash compares it with experience in negotiating
permit targets in carbon cap and trade schemes, and suggests that “... the same problems arise as under
permit allocation, namely vested interests making projections as bleak as possible in terms of GHG
[greenhouse gas] emissions in order to gain as many marketable emissions credits as possible”
(Reference 21, p.185).
The aim for carbon offsetting was that it should deliver secure carbon savings, while offering benefits
to both developed and developing countries. However, there are many indications that these goals
have not been met, particularly in the compliance offset market, with inflated prices being paid for
carbon offsets of doubtful validity which have delivered little in the way of development benefits22,6.
Categories of CDM projects, which formerly accounted for up to the majority of CDM offsets
supplied to EUETS, have been excluded from 2013.b Thus, most savings under EUETS prior to 2012
have been delivered by CDM schemes which have subsequently been discredited – meaning that use
a For a variety of reasons, including varying accounting methods and multiple trading of the same offset credits,
it is difficult to give clear figures on the amount of carbon traded per year through offsets, and estimates can
vary by a factor of ten10.
This is the pre-peer reviewed version of the following article: Hyams, K. and Fawcett, T. (2013) The ethics of
carbon offsetting. Wiley Interdisciplinary Reviews: Climate Change.
of carbon offsets has actually led to an increase in emissions by displacing domestic action to reduce
emissions. The danger that critics point to, of ineffective carbon offsetting replacing action to reduce
one’s own emissions, has occurred on a very large scale in real life, with significant environmental
consequences.
3. Underlying ethical principles
As discussed in the preceding section, disagreements about the ethics of carbon offsetting are, to some
extent, underlain by disagreements about the likely outcomes of offsetting projects, and about the
difficulties of making counterfactual judgements about what would have happened otherwise. But at
the same time, such disagreements also tend to go much deeper, with each side drawing on quite
different underlying moral principles. Proponents and critics of carbon offsetting differ not only about
whether offsetting projects can achieve what they set out to achieve, but also about what duties people
and organisations do actually have in respect of climate change mitigation efforts, and whether they
are able to discharge those duties by buying offsets. Providers and users of carbon offsets often imply
that by purchasing carbon offsets, they partly or completely discharge their moral duties in respect of
climate change mitigation. In contrast, critics often claim that individuals and organisations should
reduce their own emissions: paying others to reduce theirs doesn’t get one off the moral hook. This
view is nicely demonstrated by the (tongue in cheek) website www.cheatneutral.com, which offers
users the chance to pay others not to cheat on their partners in order to offset their own cheating.
Interestingly, as noted above, the current UK government position on offsetting recommends the use
of voluntary offsets only as an emission reduction strategy of last resort. On the other hand, the use of
offsets in the EUETS is implicitly condoned by the rules of the scheme, since the rules do not
differentiate for the purpose of assessing compliance between actual reductions achieved by the
organisation and ‘reductions’ achieved by purchasing offsets.c
What moral assumptions underlie the claim that by purchasing carbon offsets, individuals and
organisations can discharge their moral duties in respect of climate change mitigation? Whilst much
has been written on the ethical principles underlying arguments for and against carbon trading in so-
called ‘cap and trade’ schemes, almost no research has yet been undertaken directly on the related but
distinct principled questions raised by arguments for and against carbon offsetting (one notable
exception is Spiekermann23). The case for offsetting seems to draw on a consequentialist ethic; that is,
the claim assumes that acts should be judged by their outcomes. Since the outcome (in terms of
overall carbon emissions) of emitting and offsetting is the same as the outcome of not emitting, the
view claims that the two options are morally equivalent (c.f. Reference 24, p.123). But most moral
philosophers think that consequentialism cannot be the full story about ethics. Other things, in
addition to consequences, also seem to matter to our moral thinking: things like rights, justice, and
fairness. In this context, critics of offsetting assert that each of us has an individual duty to reduce our
own emissions in order not to harm the potential victims of climate change. Since that duty is owed
directly from each us to each of the potential victims, the duty cannot be avoided simply by paying
others not to flout that duty. Goodin25, for example, compares the practice of buying one’s way out of
emissions reductions to the practice of selling ‘indulgences’ by the medieval church, to absolve
b From 2013, the EUETS will no longer accept credits from projects which abate two industrial gases – HFC and
N2O from adipic acid. This ban followed many years of concern that these activities were unlikely to be
genuinely ‘additional’ and were vastly expensive considering the low cost of abating these gases at source22.
c It is sometimes thought that ethical issues apply only the voluntary offsets, and not to compliance offsets, since
the latter is merely a legal mechanism and makes no moral claims. Spash (Reference 21, p.186), for example,
writes that “The growing voluntary carbon credit sector raises the same issues of verification and credibility as
found for statutory schemes, but also raises other issues relating to motivation, ethical behaviour and social
psychology.” Whilst it is certainly true that ethical issues are more salient in the case of voluntary offsets, since
voluntary users of offsetting do so for overtly moral reasons, we should nevertheless assess the legal
requirements of compliance schemes against the standard of ethics, in order to determine whether the legal
arrangements are themselves ethically defensible. Spash is right, however, to note that issues relating to
motivation and social psychology do apply primarily to the voluntary market only. Such issues are discussed
separately in the next section of the paper.
This is the pre-peer reviewed version of the following article: Hyams, K. and Fawcett, T. (2013) The ethics of
carbon offsetting. Wiley Interdisciplinary Reviews: Climate Change.
buyers of their sins. Likewise Sandel26 compares the purchase of emission rights to throwing a beer
can into the grand canyon in return for a fee. Others have argued that trading emissions exacerbates
existing injustice by worsening an already unfair distribution of emissions, whereby the rich are able
to continue high rates of emissions at the expense of emissions of the poor (e.g. Reference 6, pp.24-
25). Both of these objections count as much against the use of carbon offsets in the compliance
market as much as they count against the use of carbon offsets in the voluntary market, even though in
the former case the use of carbon offsets is externally enforced, whereas in the latter it is not. In both
cases, it is the fact that users of carbon offsets pay others to reduce projected emissions rather than
reduce their own that triggers the principled objection.
Criticisms from the point of view of rights and fairness reject the consequentialist ethic underlying the
case for offsetting. But it is not clear that the consequentialist case succeeds even on its own terms.
For one thing, there are difficulties in ascertaining what the consequences of offsetting actually are, as
described in the previous section. But there are problems with the moral argument too. For example, if
it is better, because the consequences are better, to emit and offset than to emit and not offset,
wouldn’t it be better still to both not emit and offset? It seems entirely arbitrary to tie the offset to the
emission and judge the consequences of the option to emit and offset as if it were one, inseparable,
act. Indeed, it has been noted that some versions of consequentialism could even require that
individuals and organisations spend much of their wealth on offsets, since the gains of doing so are
likely to be so much greater than the costs23,27.
One way in which the use of carbon offsets might be defended against these objections would be to
deny that the case for offsetting must rely on a consequentialist ethic, arguing instead that the case for
offsetting must merely assume that duties to avoid catastrophic climate change are not the sort of
duties that are owed by individuals and organisations directly to the potential victims of climate
change. Instead, one might argue, humanity as a whole has a collective duty to avert catastrophic
climate change, such that each person and organisation merely has an obligation owed to their fellow
humans to discharge their own share of that collective duty (on the nature of responsibility for climate
change, see Reference 28, ch.5). One could then argue that it matters not whether a person or
organisation discharges their share of the collective duty by reducing their own emissions or by
paying someone else to do so (c.f. Reference 29, p.243 & 253-4, n. 15). One problem with such an
argument is that it requires that we pay others not merely to reduce their emissions relative to what
they would otherwise have done, but that we pay others to reduce their emissions below the threshold
that they would in any case have had to reduce their emissions to in order to discharge their own share
of the collective duty. That is, one cannot discharge one’s share by paying others to do what they
should not have done anyway: one can only do so by paying others to go beyond the call of duty.
Given the increasingly reduced capacity of the atmosphere to absorb additional emissions without
posing a significant risk of catastrophic climate change, this threshold would have to be set very low,
such that it is not at all clear whether much of what currently qualifies as offsetting really only
amounts to paying people not to do what they should not do anyway.
4. Motivation
What motivates individuals and organisations to buy carbon offsets in the voluntary market? Two
damaging charges are often made about the motivations of organisations and individuals who
purchase carbon offsets. The first is that corporate users often buy offsets for the sake of their image:
a practice that campaigners have labelled ‘greenwash’. The second is that individual users buy carbon
offsets merely to clear their conscience, continuing to engage in high carbon activities while
suppressing any associated sense of guilt.
Whilst both the claim that offsets are used to enhance corporate image and the claim that offsets are
used to clear conscience rely on empirical assumptions, the latter also relies on ethical judgements
about what the difference between doing the right thing and clearing one’s conscience actually is. One
reason that one might think that carbon offsets are a mere sop to conscience is because, as discussed
This is the pre-peer reviewed version of the following article: Hyams, K. and Fawcett, T. (2013) The ethics of
carbon offsetting. Wiley Interdisciplinary Reviews: Climate Change.
above, there are good reasons to doubt that individuals and organisations can properly discharge the
duties that they have in respect of climate change mitigation by buying offsets. Intriguingly,
Spiekermann23 has argued that, even if one could discharge one’s duties by buying carbon offsets, we
might still impugn the practice of buying offsets as merely serving to clear the conscience of those
who buy them. The reason for this, he argues, is that individuals and organisations who buy offsets at
present do so at a very cheap price. Offsets are cheap because so few people and organisations buy
them. If there was more demand for offsets, he argues, the price of offsets would rise considerably,
because the increase in demand would have to be met by additional offsetting schemes that are less
efficient than the schemes that compete most successfully in the current market. But many
organisations and individuals who buy offsets at the moment would not be willing to do so if they
became considerably more expensive, just as they are not willing to assume the costs of cutting their
own emissions. As such, Spiekermann argues that those who buy offsets (but would not buy them if
they were expensive) act merely to clear their conscience, and not ‘from duty and only from duty’.
Spiekermann’s sharp distinction between acting to clear one’s conscience and acting from duty, which
draws on the work of Immanuel Kant30, can be challenged. But his basic point, which is that
motivation is not black or white, seems sound. Even if those who buy offsets are motivated to
discharge their duties to reduce their emissions, one might nevertheless argue that that motivation is
rather weak, and disappointingly easily defeated by other interests.
The point about motivation is not merely a technicality of interest only insofar as it bears on the
ethical appraisal of users of carbon offsets: it has serious practical consequences. Perhaps the greatest
problem of all faced by voluntary carbon offsetting is, precisely, that it preys on the fact that most
people and organisations are only weakly motivated to reduce their carbon emissions. For this reason,
even notwithstanding concerns about scientific legitimacy and additionality, voluntary carbon
offsetting can never offer a general solution to climate change. In order for it to do so, the number of
organisations and individuals buying offsets would have to increase sharply. But the increase in
demand would push the price of offsetting up, as offsetting projects become progressively more
expensive once the easy pickings have already been taken. And at that point, without an increase in
the average level of motivation to reduce emissions, most people would no longer be willing to buy
them.
5. Conclusion
The paper has canvassed a range of objections to the practice of carbon offsetting. These include
warranted concerns about whether offsetting schemes will actually deliver the emissions reductions
that they claim to deliver, and about whether such reductions would have happened even without the
offsetting scheme. They also include more principle objections, objections that claim that offsetting
would not be morally justified even if it could deliver genuine emissions reductions that would not
have happened otherwise. Finally, the paper looked at ethical motivation, exploring the concern that
carbon offsetting offers more of sop to conscience than a genuine solution to climate change. In all
cases there remains much more work to be done to gain a fuller understanding of the ethics of carbon
offsetting. In the case of the applicable moral principles and motivational issues in particular, research
remains very much at a nascent stage.
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carbon offsetting. Wiley Interdisciplinary Reviews: Climate Change.
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carbon offsetting. Wiley Interdisciplinary Reviews: Climate Change.
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