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Markkula Center for Applied Ethics

The Ethics of Carbon Offsets

Hannah Maryanski

"Climate change, the loss of biodiversity, and deforestation are already showing their devastating effects in the great cataclysms we witness." (1) Pope Francis, the leader of the Catholic Church, not only acknowledges the devastating effects of environmental degradation but will also take action. In June 2015, Pope Francis released a monumental encyclical that urges all people of all religious backgrounds to embrace a new responsibility for the earth and its inhabitants.

The Pope is not alone in his urgency; as the world's greenhouse gas (GHG) emissions rise, countries, companies, colleges, and individuals are pledging carbon neutrality. Like many universities, Santa Clara University has a "carbon neutral by the end of 2020" goal, but is meeting the goal enough? As a Jesuit institution, we are called to examine the ethics of the neutrality commitment, and our impressive sustainability goals give us the unique opportunity to influence how other Jesuit and Catholic schools take action on climate change. Carbon offsetting, a common aspect of many carbon neutrality commitments, presents us with an ethical dilemma: can we pay others to forgive our pollution? As SCU moves forward in our commitment, we must ask ourselves two questions: first, whether we should purchase carbon offsets, and second, what type of offsetting techniques we should fund.

Let's start with the second question: what type of offsetting techniques should Santa Clara University fund? SCU currently purchases Renewable Energy Certificates (REC's), which are similar, but not identical, to carbon offsets. While a carbon offset represents one ton of GHG emissions reduction, sequestration, or destruction, an REC represents the environmental benefits of one megawatt-hour (MWh) of energy generated from clean, renewable sources.(2) Think of a carbon offset as paying for a forest in Bolivia that will sequester tons of carbon from the atmosphere, while an REC investment pays for the environmental benefits of megawatt-hours of wind energy from a turbine plant in Oregon. Despite what you might hear in carbon debates, the terms are not interchangeable; REC's should only be used to offset Scope 2 (purchased electricity) emissions, while carbon offsets should offset any of the 3 Scopes.(3)

The National Renewable Energy Laboratory recently released a report on voluntary renewable energy purchasing in the U.S., where they found growth in the market and the continued prominence of wind power.(4) SCU represents a part of this trend, as we buy our REC's as wind and solar power from plants in California through Silicon Valley's Green Power program.(5) In doing so, we are--in theory--fostering the economic success of renewable energy plants and encouraging future renewables development. According to the REC provider, 3Degrees, 80% of our REC's go toward western wind and 20% go to California solar, with a portion supporting solar installation in Santa Clara County.(6) In the fiscal year of 2015, SCU purchased 22,608 MWh of REC's, which represents 5,963 metric tons of CO2 equivalent.(7) This represents 75% of our annual electricity use, and since our power from Silicon Valley Power contains at least 25% of renewable energy, our electricity use is carbon neutral. In comparison, Stanford University, the recent champions of coal divestment, report no REC's or other carbon offsetting techniques,(8) while Saint Mary's College of Moraga also opts for REC's (about 3,329 metric tons of CO2 equivalent from 2012-2013).(9) Both Saint Mary's and SCU are assured that our REC investments are legitimate because we purchase certified REC's from a reputable third-party certifying organization, Green-E. And we're not alone—STARS, a premier sustainability reporting system, requires all purchased REC's to be 3rd-party certified. In this way, participating colleges and universities are held to a high standard of renewable energy purchasing in order to offset our carbon emissions

REC's seem to be working for SCU, and with the Green-E verification, we're purchasing in a responsible way. But REC's aren't our only option; SCU could also purchase carbon offsets, or voluntary emissions reductions (VER's). As mentioned previously, these carbon offsets represent one ton of GHG emissions reduction, sequestration, or destruction and can be purchased by anyone. Various credible institutions offer carbon offsets, such as the Nature Conservancy, TerraPass, and The Climate Trust, and like REC's, their offsets are often certified by 3rd-party organizations, such as CDM Gold Standard, Voluntary Carbon Standard, Green-E, or the Climate Action Reserve. These verifiers use accounting mechanisms to make sure the projects are genuine offsets: For instance, many verifiers require offsets to be "additional," meaning that the project would not have occurred without the offset investment. Or, a project must not have "leakage" that would cause emissions outside of the project parameters. These verification tools are helpful to make sure money is invested in genuine offsets, but critics aren't sure they are doing enough. For instance, the long-term effects of offset projects are usually not studied and included in the verification. If a wind turbine in a small Indian village increases petroleum consumption, thus causing a petroleum company to install a gas station and increasing the number of mopeds used, the long-term effect of the offset actually worsens emissions. The author of this scenario, climate scientist Kevin Andersen, accordingly arrives at the conclusion that "offsetting is worse than doing nothing."(10)

Before VER's can be universally accepted, important questions still need to be answered: what kind of GHG's should be included in offsets? Is tree planting a legitimate carbon offset? What are the long-term effects of offset projects?(10) When the musical group Coldplay's concert travel-offsetting mango trees died after a few years, who should follow up?(11) More research is needed on the success of voluntary carbon offset projects in order to determine where money should be invested. And perhaps even more important, both VER's and REC's should have a central governing body that could be modeled after the Kyoto Protocol's Clean Development Mechanism to ensure that carbon offsets are traded fairly.

Thus, we can answer the second question (what type of offsetting techniques do we fund?) for now; it is appropriate for SCU to continue purchasing REC's. And perhaps as SCU expands its counting of Scope 3 emissions, we can also carefully select legitimate VER's to expand our offsetting. But we must now consider the first question this article posed: should SCU purchase an offsetting technique at all? The debate about the ethics of offsetting techniques usually comes down to two views: the consequentialist and virtue perspectives.(12) The consequentialist view values the ends over the means; if we emit greenhouse gases, we should find some way to offset the emission so the end result is neutral. Thus, the consequentialist view would say that both VER's and REC's are ethical ways to achieve carbon neutrality, even if the institution only offsets as part of its carbon neutrality plan.

A virtue ethic, on the other hand, considers the morality of the ends and the means. In other words, we must achieve carbon neutrality in a way consistent with our Jesuit values. "Carbon neutral" is more than something SCU slaps on a brochure without care for how we get there; it is a responsible commitment with the primary goal of taking responsibility to improve the planet. SCU already has the practice of reduction before REC purchasing, a practice that the virtue ethic would have us continue. We should also continue to conduct a cost-benefit analysis, comparing the cost of REC's to the cost of making on-campus improvements. If SCU does eventually decide to purchase VER's, a virtue ethic demands that we carefully research and select a VER project most in-line with our Jesuit values. Instead of transitioning the burden to the developing world, for instance, we could fund a methane recapture project at a local landfill. Since we are signatories of the President's Climate Commitment, we should also consult the ACUPCC's offset recommendations. Although the ACUPCC does not yet have a specific standard for offsets, they do have several criteria that they urge universities to consider (including additionality, transparency, measurability, permanence, etc.)(13) Currently, SCU is on the right track from a virtue ethic standpoint. We should continue to purchase third party-certified REC's to offset our remaining emissions, and we may want to look at certified VER's in the future. Someday we may be able to diversify our neutrality portfolio with carbon offsets, but until then, let the west coast sun blaze and the wind turbines spin.

Hannah Maryanski is an SCU student and environmental ethics fellow at the Markkula Center for Applied Ethics.

Feb 1, 2015