Event Recap: Member Perspectives On Carbon Offsets
May 26, 2021
Written by Isabella Gambill, Senior Policy Advisor on Climate, Energy, & Resilience | May 13th, 2021
BACKGROUND
Across the nation, municipalities and states are taking bold action to set binding greenhouse gas emissions reduction targets—many endeavoring to achieve “net zero emissions” by 2050. In general, these commitments aim to strike a balance between minimizing the volume of greenhouse gases being emitted (direct emissions reduction) and the volume of greenhouse gases being avoided or removed from the atmosphere (indirect emissions reduction). As local governments develop implementation strategies to achieve net zero emissions by 2050, significant questions arise about how to define the “net” part in net zero emissions, which leads to discussions about what percentage of emissions can be compensated for by tools like carbon offsets. Here in Massachusetts, the Carbon Free Boston report and the City of Boston Climate Action Plan (CAP) Update in 2019 stated that up to 90 percent of carbon emissions in Boston could be eliminated with existing technologies, with the remaining 10 percent accounted for by mechanisms like carbon offsets.i At a Commonwealth-level, the Baker Administration recently defined “net zero by 2050” to include 85 percent direct emissions reduction, with an option for tools like offsets compensating for the remaining 15 percent of statewide emissions.ii
Despite the potential for offsets to compensate for 10% of citywide and 15% of statewide emissions under net zero by 2050 commitments, little to no guidance has been provided from City or State administrations around best practices for carbon offsetting. While lawmakers have affirmed that the Commonwealth cannot feasibly achieve net zero emissions without offsets, the topic of offsets remains opaque and controversial. Some stakeholders are adamantly against carbon offsets, some are wary but intrigued, some are neutral, and others stand ready to purchase offsets once best practice recommendations become available. Similarly, there is a spectrum of experience and comfort amongst A Better City’s membership around incorporating offsets into organizational climate action plans, but many members have expressed interest in learning more about offset best practices. Especially for buildings that operate 24/7 with highly energy intensive and high energy reliability needs like hospitals, labs, or financial data centers, carbon offsets will be necessary to compensate for unavoidable emissions as these buildings decarbonize. Depending on the offset project or type, a certain amount of carbon credits is available for purchase, which can be bought or sold in a voluntary or compliance carbon market setting. Although at their core carbon offsets, or more specifically, one carbon credit, is meant to represent one metric ton of carbon dioxide that has been permanently removed from the atmosphere or avoided elsewhere -- additional technicalities arise around effective third-party verification, long-term offset project stewardship, and incorporation of local community and other non-carbon benefits into offsetting best practices.
Over the past year, A Better City has been researching offsetting best practices through engagement with partner organizations, offset technical experts, and ABC member organizations – some of whom were featured in our May 13th panel event.
Event Summary: Member Perspectives on Carbon Offsets
On Thursday, May 13th, A Better City hosted a panel conversation exploring member perspectives on carbon offsetting. With just under 60 members in attendance, we discussed what three organizations operating across sectors and at different geographic scales are thinking around carbon offsetting best practices: Boston University (local), Mass General Brigham (state), and Novartis (international). Through this panel event, we wanted to initiate an open dialogue to share what some of our members have been thinking on carbon offset best practices and to start a broader conversation on how offsets may be used for emissions reduction compliance moving forward.
From the team at Boston University, we heard from Dennis Carlberg (Associate Vice President for University Sustainability) about the University’s 5 high-level climate goals – prepare for the impacts of climate change, net zero direct emissions by 2040 (from a 2006 baseline), act on indirect emissions, climate change education and research, and integrate the Climate Action Plan (established in 2016-2017) into BU’s broader strategic plan – and the role that carbon offsets are playing in BU’s commitment to net zero by 2040, in particular. Dennis shared BU’s experience selling offsets via the Chevy Clean Campus Energy Campaign, in which Chevy wanted to develop a more robust structure for electric vehicles by partnering with higher education institutions. Under this campaign, BU sold offsets that were achieved through energy efficiency projects. Dennis shared his confidence in the rigor and comprehensive nature of Verified Carbon Standard’s (VCS) independent third-party verification for offset projects from the perspective of an offset seller. He also shared BU’s intention to begin to explore opportunities for purchasing offsets in order to compensate for indirect emissions reduction that will be necessary to achieve net zero emissions by 2040 – the Sustainability team at BU is considering how they move, what they buy, and how they waste as they consider indirect emissions reduction initiatives. BU is currently exploring offset purchasing opportunities to compensate for indirect travel emissions reduction, as transportation is equivalent to about ¼ of BU’s scope 1 and 2 emissions. Dennis and the BU Sustainability team are working with the Campus Climate Lab to understand how to pilot an offsetting program that can address air travel emissions associated with the University.
From Mass General Brigham (MGB), we heard from Sarah Fackler (Program Manager of Sustainability) and Dennis Villanueva (Senior Manager of Energy & Sustainability, Real Estate & Facilities). Sarah shared that MGB is in the beginning stages of offsetting best practices research, and the MGB team is currently focusing on setting the stage to implement offsetting within MGB’s broader climate strategies. As the largest employer in Massachusetts and owner of many large healthcare buildings that operate 24/7 with high energy intensity and high energy reliability needs, MGB is particularly interested in learning how offsets can be an option for impossible-to-eliminate emissions. MGB is taking steps to 1) align their offset best practices with global frameworks and standards like the U.N. Sustainable Development Goals (SDGs), especially goals 12 (responsible consumption and production), 13 (climate action), 14 (life below water), 15 (life on land), and importantly, the equity-focused goal 16 (peace, justice, and strong institutions); 2) follow a science-based approach to establish offsetting best practice guidance at MGB; and 3) procure high quality offsets that are aligned with MGB’s corporate strategy.1 Sarah emphasized that businesses like MGB must take an active role in the just transition to a resilient and sustainable future, and to think about opportunities to center equity every step of the way. Dennis also emphasized that we need immediate action to promote carbon removals from the atmosphere, and tools like carbon offsets could help to address needed infrastructure upgrades, new technologies, and expansion of renewable energy. From Dennis’ perspective, carbon offsets should be allowed as an important transitional tool and time-buying measure as we wait for necessary infrastructure upgrades, financing, and the expansion of clean replacement fuels like green hydrogen to scale up. Particularly considering the extreme challenge ahead of reducing thermal loads for large, hard-to-decarbonize buildings like hospitals, offsets will need to be used to address unavoidable thermal emissions. The team at MGB agrees that carbon offset projects need to meet additionality with verifiable results, and that the PAVER+ (permanence, additionality, verifiable, enforceable, and real, “plus” non-carbon co-benefits) framework with SDG alignment, should be seen as a bare minimum for best practices.2
Finally, we heard from Jim Goudreau (Head of Climate) at Novartis, who also sits on the Carbon Removals Technical Working Group for the revision of the U.N.’s Greenhouse Gas Protocols and has considerable international carbon offsetting experience. Jim began his remarks with the acknowledgment that carbon offsetting is both a very important and very controversial topic, and that a well-informed voice from the business sector will be necessary to influence best practices. Jim also emphasized a need for urgency at the core of this conversation, and that with offsets that prioritize carbon removals vs. carbon emissions avoidance, we can promote offset projects that follow the PAVER+ framework, with the non-carbon benefits of climate resilience, health, biodiversity, and opportunities to address the interdependency of risks associated with climate change. Novartis’ climate targets include a commitment to carbon neutrality across their company operations by 2025 and net zero emissions across their value chain by 2030. 25% of Novartis’ emissions are associated with scope 1 or 2 emissions, with the remaining ¾ associated with scope 3 emissions across their value chain and suppliers, which can often prove challenging to decarbonize. Novartis has been involved in offset projects since 2007, and Jim has been involved in offset projects from locations including Argentina, China, Mali, and Peru. At the international offset practitioner level, conversations going into the U.N.’s COP26 in Glasgow this November 2021 are centering around how to define offset best practices within the Paris Climate Agreement and subsequent international climate commitments, since the previously used offset Clean Development Mechanism (CDM) has expired and experienced considerable challenges. For example, questions remain like can carbon credits transfer from one country to another, and if so, what would the accounting and governance framework look like? Revisions to the Greenhouse Gas Protocols are being designed and written currently, and as we move forward, offsets need to be a part of our international climate solutions as energy efficiency measures and technological advancement will not achieve needed emissions reduction and carbon removals quickly enough. Novartis is seeking to expand and scale up their carbon offsetting practices, focusing on PAVER+ carbon removal projects.
In our Q+A discussion, we had some initial respondent comments from Lisa Tornatore (Director, BU Sustainability) and Stephen Ellis (Data Manager, BU Sustainability). Building off Jim’s comments around addressing emissions associated with organizational value chains, Lisa emphasized BU’s opportunities around scope 3 emissions reduction and the need to accelerate sustainability goals with an emerging Sustainable Purchasing Program. Lisa also discussed the University’s framing of its Zero Waste Plan as it relates to upstream management of waste and BU’s purchasing strategies. Stephen expanded on panelists’ comments around PAVER+ as a baseline offset best practices minimum, and emphasized viewing offsets as long-term investment projects that should center investments in people. With extensive experience in the offset data management, verification, and accounting space, Stephen also mentioned his interest in prioritizing offset social co-benefits that are tied to efficiency of operational systems. Examples of these projects could include landfill offset projects that combine maintained nature trails and methane capture, or offset projects in Kenya that have invested in reducing labor intensive stoves with both reductions in emissions alongside reduction of cooking time and positive health outcomes. Stephen also agreed with panelist comments that the business sector is leading on conversations around offset best practices, and should provide win-win scenarios for multiple non-carbon offset co-benefits whenever possible.
In the active Q+A session, some examples of topics covered include:
- In response to a question about how a global company like Novartis could think about designing a customized PAVER+ framework for a City like Boston, Jim suggested to design for opportunities to partner with willing and interested local communities to try something different from traditional offsetting practices and create a model that centers community benefits and local input in offset projects. Stephen also added the importance of stopping any new projects from developing that go against a the priorities of a customized PAVER+ framework in Boston, like blocking the East Boston substation as a key example of environmental injustice. Finally, Dennis C. from BU mentioned the example in which Brown University students partnered with the City of Providence to advance energy efficiency projects by insulating homes, which also provided additional educational co-benefits.
- After being asked to expand on Dennis V.’s comments on green steam, Dennis from MGB shared that before the 80s, the Kendall Station generated electricity with high pressure steam and ecological impacts on the Charles River, that at the time served as a cooling agent to cool down excess steam generated as a byproduct of electricity production. In the late 1980s, Mass General Hospital (MGH) suggested building a pipe to connect the hospital to this Station and use the excess heat byproduct that the steam generated to compensate for MGH’s heating needs. In 2006, they built an additional pipe connecting the Kendall system and Boston system. From there, Vicinity (also an ABC member, formerly known as Veolia) made great improvements and efficiency upgrades to the steam production and created a zero-emissions heat byproduct system, in which you can get “green steam” as a clean byproduct of the local generation of electricity.
- Finally, in response to a question around where ABC members with no prior offsetting experience should start, panelists agreed to ensure independent third-party verification through verifiers like VCS or the Gold Standard, and to reach out to credible local NGO partners around offset design. Additional opportunities to partner with higher education institutions, other companies, and especially with local environmental justice (EJ) communities, will be vital to ensuring success. Intentional partnership with EJ communities could inform offset projects customized to address what current struggles are being faced in local EJ communities. All panelists agreed that we need to start these conversations around offset best practices now, and that inaction is not an option.
A Better City is in the final stages of editing and designing our forthcoming carbon offset report Establishing a Regional Offsetting Program for Emissions Reduction Compliance in Massachusetts:
Challenges and Opportunities, to be released in Summer 2021. For more information on ABC’s offset research and/or near-term offset engagement opportunities and next steps, please contact Isabella Gambill.
SOURCES
1 United Nations 2030 Agenda for Sustainable Development (2015) The 17 Goals. https://sdgs.un.org/goals
2 Jenna Goodard and Alexia Kelly, World Resources Institute (2010) https://www.wri.org/research/bottom-line-offsets
i City of Boston. (2019) Climate Action Plan (CAP) Update. https://www.boston.gov/sites/default/files/embed/file/2019-10/city_of_boston_2019_climate_action_plan_update_4.pdf
ii Secretary Theoharides (2020) Net Zero By 2050 Letter of Determination, April 22, 2020.
