When the daily commute is a walk from the kitchen to the home office^[1], how can a distributed company reduce its environmental footprint? Lantana does not manufacture products. We do not have corporate offices to retrofit for energy efficiency. What can our business do to reduce its impact on the planet? One important option is to address our greenhouse gas emissions from business travel.

Greenhouse Gas Emissions from a Distributed Company

Emission from many human activities add significantly to the flows of carbon dioxide, methane, and other heat-trapping greenhouse gasses into the atmosphere, and so drive climate change—warmer temperatures, more extreme storms, and changes in rain and snowfall patterns. “Continued emission of greenhouse gases will cause further warming and long-lasting changes in all components of the climate system, increasing the likelihood of severe, pervasive and irreversible impacts for people and ecosystems.”^[2]

Reducing human-generated greenhouse gas emissions is key to addressing climate change. But what do we do when our work requires us to attend meetings we can’t walk or bike to? We have two options: reduce Lantana’s number of in-person meetings or buy carbon offsets (or both).

What Are Carbon Offsets?

Carbon offsets (also known as carbon credits) are certificates of greenhouse gas reduction. Each offset certifies that 1 metric ton of carbon dioxide-equivalent was removed from the atmosphere or from current emissions. Carbon dioxide equivalency refers to the amount of each of the other key greenhouse gas—methane, nitrous oxide, etc.—that has the same global warming potential as 1 ton of carbon dioxide.

Offsets reduce the impact of activities that, themselves, cannot be carbon-neutral. The airplane that takes me to a conference emits carbon dioxide and other greenhouse gases. I can offset that pollution by planting trees to take up an equivalent amount of carbon dioxide or by switching from buying electricity generated by coal to buying electricity generated by solar panels. But what if I have no place to plant a tree? Or I already buy electricity generated by solar panels? I can donate to a project elsewhere that plants trees or shuts down coal-fired electricity generation by buying carbon offsets.

Offsets make emissions reductions tradeable—between people, activities, and organizations.

The world of carbon trading is divided into the compliance market—where governments and industries required to reduce greenhouse gas emission can trade carbon credits—and the voluntary market—where individuals, companies, and organizations can donate to greenhouse gas reduction projects by buying carbon offsets. The voluntary carbon market has standards, registries, and project categories separate from the compliance market and is testing new ideas about “payments for performance” through agreed-upon standards for how to monitor and verify the quality and validity of the carbon offsets traded. These days, the voluntary market in North America trades as much carbon as the compliance market.^[3] Outside the US, emissions cuts are driven by mandated caps on greenhouse gas emissions and compliance markets operate at a large scale. The international voluntary market is a small, yet significant, fraction of overall carbon trading.

Standards, Verification, and Certification—Keeping Offsets Honest

How do I know the carbon offset I buy will do any good? Just as in health information exchange, shared standards, verification, and certification are essential to trading.

Multi-stakeholder groups of conservation organizations, corporate responsibility non-profits, and international development agencies join forces to develop multiple standards. Several standards are rising to the top as the most useful and implementable and two now lead the voluntary carbon market:

• Verified Carbon Standard (VCS) is the most common offset project standard, popular for forestry and wind projects.^[4] VCS is often combined with Climate, Community, and Biodiversity (CCB) Standards, which focus on projects that demonstrate co-benefits of addressing climate change while simultaneously supporting local communities and conserving biodiversity. Adding the CCB Standards to VCS certified projects captures the idea that we don’t want to reduce emission by destroying communities or ecosystems.
• Gold Standard (GS) verifies emissions reductions plus sustainable development goals.

These standards score multiple aspects of each project, including verification that the greenhouse gas removals are real and quantifiable, permanent, not double-counted, and additional (meaning the project would not have happened without selling carbon offset). Standards also address leakage, the additional carbon emissions created off-site due to the impacts of the project on the surrounding area. Emissions reduction projects use accredited third-parties to validate feasibility and risk assessment, emissions baseline estimates, and verify the total greenhouse gas mitigation. Projects are listed in registries that issue offset credits with unique identification numbers for each ton of emissions reduction. Those offsets can be bought from brokers and resellers.

Once I buy an offset, what happens to it? I know the money is going into a project that either sequesters carbon from the atmosphere (such as in new trees) or reduces emissions (such as replacing a fossil fuel-fired power plant with solar panels). When I buy the offset, the unique identification number is retired by the organization that registered it. Neither I nor anyone else can resell it.

Keeping Ourselves Honest

Does buying carbon offsets mean I don’t have to change my behavior? No. Offsets are not a silver bullet; they are a useful tool. We can use them to boost those activities that we cannot participate in directly. We can also find ways to reduce our own emissions. For example, I can choose to donate to (buy carbon offsets for) projects that I cannot build myself—new wind power or high-efficiency public transportation—plus I can change my own behavior by switching to solar electricity and traveling to my next meeting by train instead of flying. As the Carbon Fund says, “Reduce what you can; offset what you can’t.”⁵

That is the approach behind greenLantana. The next blog in this series will explore how our distributed company chooses to invest carbon offsets.

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[1] See two recent blogs: this year’s Earth Day blog (The Case Against Commuting) and Working at Lantana: Onboarding, which points out that the new employee’s the biggest dilemma may be “choosing the location of your work-station (pro-tip: the closer to your fridge, the better)”.

[2] IPCC. “Summary for Policy Makers,” Climate Change 2014: Synthesis Report, pg 8. https://www.ipcc.ch/pdf/assessment-report/ar5/syr/AR5_SYR_FINAL_SPM.pdf

[3] Ecosystem Marketplace, Market Watch: North America, Voluntary Markets. http://www.ecosystemmarketplace.com/marketwatch/carbon/north-america/#voluntary-markets (accessed July 5, 2016). Also referenced in Forest Trends, Ahead of the Curve: State of the Voluntary Carbon Market 2015. http://forest-trends.org/releases/uploads/SOVCM2015_FullReport.pdf

[4] Forest Trends, Ahead of the Curve: State of the Voluntary Carbon Market 2015 (figure 9, pg. 16). http://forest-trends.org/releases/uploads/SOVCM2015_FullReport.pdf