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This is part of a four-piece Climate Series designed to help large emitters chart an achievable path to net zero emissions. Access the full series here.
Now that you’re company has made a pledge to become net zero, it’s time to consider the long-term strategy for committing to that promise. With the need for emission reduction solutions experiencing an unprecedented surge in demand from companies across the world pledging to go net zero, purchasing carbon credits from a strained and unreliable carbon market is not a viable long-term solution. This article will explain why that is, and show how a dedicated Carbon Removal Solution (CRS) is the only long-term strategy for reaching true net zero—for businesses and the environment.
The good news and the bad news is that the need for solutions to meet the demand of companies looking to achieve net zero emissions is growing at breakneck rates. By the end of 2019, an optimistic 23% of the Global 500 had committed to achieving carbon neutrality by 2050 in alliance with the Paris Climate Agreement's pledge to limit the global average temperature rise to 1.5 °C. However, it is likely this statistic is in need of updating. The number of businesses and governments worldwide pledging to go net zero more than doubled within the first nine months of 2020 alone, spurred by the myriad of global disasters experienced in parallel with the COVID-19 pandemic. With the amount of net zero commitments expected to continue rising over the coming decade, we are looking at a very real problem to solve---one of supply and demand.
One of the most common ways for businesses to claim carbon neutrality is through the purchase of Verified Carbon Units (VCUs), or carbon credits, that offset their emissions. The market equates 1 carbon credit to 1 ton of carbon equivalent (tCO₂e) removed or avoided. Credits are purchased either voluntarily or by compliance through brokers representing a portfolio of projects that ideally offer a reduction in global carbon more than would have occurred in the absence of that project. Examples of offset projects include renewable energy implementation, energy efficiency improvements, and carbon sequestration through reforestation and soil. The unpopular truth, however, is that not only does purchasing carbon credits often mean investing in low-impact carbon reduction and avoidance schemes that can skirt the line of 'greenwashing,' but also, as more businesses commit to going net zero, demand for carbon credits will soon outpace supply.
Given the net-zero boom of late, there has been a substantial increase over the past few years in the amount of voluntary carbon credits purchased on the carbon market. Ecosystem Marketplace's (EM) State of the Voluntary Carbon Markets 2020 report notes the volume of carbon credit transactions tracked by their survey in 2019 (the latest year for which data is available) was up 6% from the previous year, totaling credits equating to just over 104 million tCO₂e.
While that sounds promising, the combined output of the Global 500 alone was 5 billion tCO₂ in 2016, roughly 10% of the world's total greenhouse gas emissions. In order to meet the rising demand for net-zero solutions, EM claims the carbon market must meet at least a 15-fold scale up by 2030. This is a highly problematic goal. The quick upscaling makes an already loosely-regulated market vulnerable to an even more low-quality credits and spotty oversight. Moreover, with over 33 billion tCO₂ emitted globally in 2019, even if the voluntary carbon market is able to scale at a rate of 15 times current supply, this still leaves an excess of over 30 billion tCO₂ in the atmosphere to be removed in order to save the planet. And that is assuming all carbon credits moving forward are offsetting emissions by removing carbon and not simply reducing or avoiding.
For companies that are beholden to large carbon footprints, a comprehensive sustainability strategy is one that circumnavigates the reliance on the carbon market altogether. Implementing a true net zero pathway involves a two-fold approach: first, reduce Scope 1 and Scope 2 emission footprints to as close to zero as possible, and then, remove any remaining emissions as it is being produced. An even broader sustainability strategy will take its efforts one step further by identifying pathways to removing more carbon than the company produces, effectively creating negative emissions that begin to lower the company’s historical carbon footprint. No matter how broad or focused your immediate efforts, the solution is dedicated carbon removal.
Dedicated carbon removal solutions (CRS) are developed in collaboration with a single business so that all VCUs produced by the solution are dedicated to permanently or semi-permanently removing that company's emissions from the atmosphere. In that way, a project can be calibrated to pull 1 tCO₂ from the atmosphere for every 1 tCO₂ a company emits. Additionally, this enables new removal projects to come online, contributing to added carbon removal where none existed previously. The result is permanent carbon removal that provides measurable impact in balancing a company’s greenhouse gas emissions for the long-term.
The impact of Recapture's Dedicated CRS model is even broader than simply dependable, permanent carbon credits. It uses the reforestation of degraded farmland and sustainable timber harvesting as a financial mechanism that allows companies partnering with Recapture to receive a return on their initial investment. In addition to providing a financial benefit to corporate partners, Recapture’s dedicated projects can provide significant co-benefits to local economies in emerging markets, reduce pressure on native forests, and permanently return atmospheric carbon emissions back to the geosphere at a sequestration rate that exceeds 10 times that of other removal projects.
Long-term strategies for companies transitioning to net zero emissions need to think holistically about the financial sustainability, measurable impact, and future trends of the burgeoning carbon market. Right now, the direction the voluntary carbon market is headed looks problematic on all three fronts. By choosing a dedicated carbon removal solution to offset emissions instead of purchasing credits through a broker, you'll avoid the downfalls of traditional third-party offsetting. Ensuring your company is investing in quality VCUs at a fixed price and predictable supply, while making a positive return in the process, is a true long-term strategy for the future of our planet.
Want to see how Recapture can impact your long-term net-zero strategy? Our experts are ready to put together a complimentary profit-driven removal model specific to your business. Get in Touch.
Adele Barbato is a former Climate Adaption Fellow at Recapture. She has degrees in anthropology and world history from Harvard, Northeastern, and Monmouth universities. Adele has been studying and writing on the intersections of climate and human movement for nearly 20 years, and is the founder of an online publication and advocacy project dedicated to supporting practical preparations for climate migration. In a parallel life, she also leads digital transformation and change management initiatives within large, global museums. This work has allowed her the privilege of becoming intimately familiar with the fascinating, preeminent collections of notable institutions such as the Fine Arts Museums of San Francisco, the Lucas Museum of Narrative Arts, and Harvard's Peabody Museum of Archaeology and Ethnography.