Carbon cop-outs

GREEN ISSUE: ENVIRONMENT:Can we really buy salvation for our environmental sins or is carbon offsetting a cod?

DO YOU feel a pang for the environment every time you board an aircraft to get to a meeting? Or maybe your company's carbon footprint is getting too big for its boots. Bringing down your carbon emissions is a surefire way to make your business a greener concern, but what about the tons of carbon you can't avoid?

One way to make your carbon status neutral is to offset those stubborn emissions by supporting environmental projects elsewhere, particularly in the developing world. But carbon offsetting has been lambasted by some activists, comparing the process to "papal indulgences" and buying salvation for your sins.

However, proponents say, if done properly, carbon offsetting can complement a strategy to bring down carbon emissions and even be good for your company's bottom line. Whatever your motivation, the time to do something is now, says Edward Hanrahan, executive director of JPMorgan ClimateCare, an Oxford-based agency that manages carbon offsetting for heavy-hitters like Land Rover, PricewaterhouseCooper and Aviva. Clients pay the agency around €10 per ton of their carbon emissions, and the money is used to reduce equivalent emissions in the developing world.

"At the very macro level, we know we need to reduce emissions," says Hanrahan, noting that a global rise of two degrees could mean four or five degrees in marginal areas of the developing world, where people are already living in difficulty. "We have a global issue here - and those of us in the developed world have a responsibility to reduce it as much as we can."

The UK is aiming for 80 per cent reduction in carbon emissions by 2050 and, while it's a noble target, it's hard to grapple with day-to-day in 2008, says Hanrahan. "Eighty per cent is a big number and it gets on people's radars, but 2050 is 42 years away and one of the issues of getting people moving on climate change is the difference between urgent and immediate: tackling climate change is urgent, but when you walk out the door, it's only immediate if you live in a place like New Orleans or Bangladesh."

The big growth area for carbon emissions will be in the developing world, which is why we need to target financial resources there, to lay down greener infrastructure and help populations adapt to changing climate conditions, according to Hanrahan. "There is a finite amount of money available for us to tackle climate change and we have to direct our funds to areas which are going to give us the most reductions for our euro," he says. "That means intervening in the development part of the developing world to cut emissions."

This is where offsetting comes in, by helping to build clean energy from the start. "Say someone wants to build a coal-fired station in China or in Africa - what carbon finance says to them is 'don't build that, we will pay for you to build a wind station'," explains Hanrahan.

ClimateCare puts the offsetting money into a range of projects in the developing world, including providing manual "treadle" pumps in India that allow farmers to access water and increase the output of the sun-baked land. As well as replacing the less environmentally-friendly diesel pumps, which farmers could ill afford to hire even once a year, the increased harvest yield has immediate social benefits too, says Hanrahan. "It's all about survival for a lot of these guys and the treadle pump allows them to get greater crop yields so the fathers don't have to move to urban centres and they get enough money to send children to school."

ClimateCare is also replacing traditional domestic fires in parts of the developing world for less environmentally destructive stoves. The cleaner air can help cut rates of respiratory disease and potentially help protect forests, says Hanrahan.

But how can you be sure your offset money gets to where it needs to work? Accountability is key. Last year JP Morgan Chase acquired ClimateCare, which Hanrahan says improves the auditing capacity. "We guarantee that for every ton you order, a ton will be reduced from one of our projects in the developing world, and at the corporate level we wanted to offer banking-level security. Large clients who might have been offsetting five million tons a year with us wanted to know that security was there."

The case for moral responsibility in managing your carbon emissions is strong, but at a time when many companies are struggling to meet basic costs, is there a reasonable business argument for voluntary carbon offsetting? Hanrahan claims it engenders good feeling among shareholders and consumers.

Green Party TD and transport spokesman Ciaran Cuffe agrees that, from a commercial perspective, it's not a huge cost, and adopting carbon-reducing practices now will stand to companies as the cost of carbon rises. "It's a challenge, the focus has been on the economic crisis over the past few months rather than the topic of climate change, but I think there's great opportunity in a downturn to change the way we do business and move toward greener practices."

In particular, the Greens have been looking at alternatives to air travel - such as taking a ferry and train to London or Brussels - and, where a flight is needed, they offset through the Swiss-based agency myclimate.org, which supports projects around the world to reduce emissions and contribute to sustainable development.

"You pay a certain amount; I know some people have laughed at how little - maybe €10 to offset a return flight to Brussels. It's not much, but I would argue that the real economic cost of carbon isn't being used at the moment. I have no doubt that the cost will rise."

He advises companies not just to offset carbon, but to embrace the full mindset and look at their carbon emissions - particularly air travel - and seek out alternatives. "For people on the east coast going to England, it's not a huge journey to go by train. You can leave Dún Laoghaire at 11.30 and be in London at 6.30, and that's not that far off going out to Dublin airport and getting stuck in traffic."

Once you have reduced your carbon footprint, the rest can be offset. But Cuffe warns companies and individuals to shop around and offset with a reputable agency.

"The real challenge with offsetting is that you don't see where the offsetting is happening. It's not very transparent, and a lot of the discussion at climate change conferences these days is about getting a reputable standard on this," he says. "There are a lot of companies out there who say we are going to plant trees for you, but if you are going to plant trees you have to make sure they are there for ever, and that's a big ask of any company to make sure they are there in perpetuity. It's a fraught area and it's evolving quite rapidly."