The Offset Balance

By James Farley, Co-CEO at Victor

As calls for greater environmental action become louder, what role does carbon offsetting have on a path to climate sustainability? We speak to four industry experts to find out

The world’s first carbon offset project was launched in 1989 when Connecticut-based Applied Energy Services financed an agriforest in Guatemala to offset the emissions of their new coal-fired power plant. While the project’s founders claimed the venture to be a success, several independent studies argued that while the project design was well intentioned, the environmental and social impact was significantly lower than initially modelled and, ultimately, the emissions were never fully offset.

In many ways, a failure would not be surprising. Innovative projects burdened with a myriad of sensitive dependencies rarely succeed first time. What’s undeniable though is the fact that this initiative was visionary. Eight years later, the signing of the Kyoto Protocol enabled the global commoditisation of the carbon market. It allowed countries that had emission units to spare – emissions permitted but not “used” – to sell this excess capacity to countries that were over their targets. With globalisation on an unstoppable rise, this was a global solution to a global problem. Over time, the conversation around offsetting has become more complex and its place in sustainability increasingly debated.

Critics point to the fundamental fact that the practice of offsetting does not itself create an actual carbon reduction. They argue that the positive effects of offsetting projects are difficult to estimate and monitor and, in some cases, projects would’ve been viable without investment. Critics claim that the unregulated Voluntary Carbon Market encourages adverse behaviours, and that individuals and organisations may choose an easier path of pay-to-pollute to avoid the complexities and costs of reducing emissions at the source.

The key argument that advocates offer is that without carbon offsets and an offset market, there isn’t a ready alternative open market mechanism available to individuals and organisations that wish to generate environmental improvements in all areas of the world. Advocates also point out that projects can bring a multitude of other social benefits to countries that greatly need them and that there is a high level of independent auditing at both the project scoping and monitoring stages.

As we emerge from the pandemic, there is growing public support for a more environmentally sustainable future and more aggressive actions to realise this aim. These calls are met with varying levels of commitments by corporations that, over time, will face increasing pressures to formally chart their paths to Net Zero. Expanding offset markets while investing in carbon reduction systems and infrastructure will be key.

In Europe, Former Bank of England Governor Mark Carney has been looking to improve the carbon markets. His position is that the voluntary offset market “operates in the shadows,” with some good “but lots of bad” schemes that “hurt” carbon-reduction efforts. Carney’s recent Taskforce On Scaling Voluntary Carbon Markets recommended that a regulator oversee the market’s growth and allay fears of ‘greenwashing’ or using ineffective credits to self-promote eco-credentials. 

At a macro level, we know that carbon credits represent the potential to offset about 10 percent of overall climate change, so while they certainly have a part to play on the path to a more sustainable future, they only form part of the solution.

To mitigate means that if you have to fly, then at least have the good grace to clean up after yourself


Private aviation offers a prime case study of an industry that needs to go through several stages of reinvention to reach true sustainability. In the long run, electric and hydrogen planes will herald the advent of true Net Zero for the industry, though electric solutions are at least a decade away and hydrogen is on a longer path to viability. However, given that a private jet emits up to 20 times more CO2 per passenger mile than a commercial airliner, action needs to be taken now and a defined, practical and multi-stage path for the industry be charted.

Victor, the environmental leader in the private aviation sector, has laid out a clear direction for others to follow. “Our sustainability mantra has always been: Avoid, Reduce, Mitigate and Innovate for the future,” says Victor Chairman Clive Jackson. “To mitigate means that if you have to fly, then at least have the good grace to clean up after yourself. That might include purchasing carbon offsets, optimising flight routes or flying with sustainable aviation fuel (SAF) to reduce emissions. We do all three. It’s a substantial cost – hundreds of thousands of dollars each year – that comes out of our bottom line. But we fly the leaders of the world and we need to embrace the responsibility that comes with the privilege.”


Senior Climate Advisor, Greenpeace UK

Carbon offsetting, at its simplest, involves paying for someone else to reduce or remove carbon, while you carry on pumping into the atmosphere. This is nothing new. But right now, it’s being supercharged. As thousands of businesses announce net-zero pledges, too many are banking on carbon offsetting as a substitute for the hard but necessary work of decarbonisation.  

The problem is that carbon offsetting doesn’t do what it says on the label. Offsets don’t “neutralize” or cancel out emissions. To meet the objectives of the Paris Agreement and to avoid the worst impacts of catastrophic climate change, it is essential to begin a massive reduction in carbon emissions now – by around 50 per cent in the next decade. Protecting forests and restoring natural ecosystems is vital both for biodiversity and the climate, but we must be doing that as well as cutting emissions directly, not as a substitute. 

Greenpeace UK doesn’t buy carbon offsets. However, in 2009/2010, we set a target to reduce emissions by 42 per cent in a 10-year period. This target was achieved by planning and prioritising projects based on their environmental, economic and social impacts. Our 2020 emission levels are approximately 42 per cent lower compared to 2010. 

We also reduced our environmental impact in a financially sustainable way: the global net present value (NPV) of all the projects implemented during the 2010-2020 period is positive. This means that instead of spending money on improving our environmental performance, we achieved an overall cost-reduction per tonne CO2 saved (over the lifetimes of the projects). We are now entering a new 10-year plan, focusing on reducing our energy consumption while maximising on-site renewable energy generation. 

The ambitions of Total, EasyJet, Goldman Sachs, etc, as part of the Taskforce to Scale Voluntary Markets that propose to scale that market up to 160 times its current market value seem far more based on the money from trading carbon credits and reputational gloss for participants, than whether these efforts help us stay below the 1.5°C temperature rise limit – the objective of the Paris Climate Agreement. 

Schemes that claim to have “avoided” harm through a simple bank transfer are impossible to verify and too often based on exaggerated claims. A one-off payment for a carbon credit does not assure the growth of trees, nor protection of forests from fires or industrial pressures, across the centuries that polluters’ emissions will linger in our atmosphere. 


Carbon & EAC Trader and Sustainability Advisor, Vertis Environmental Finance

Since 2015, 194 have nations signed the Paris Agreement but, to date, national policies are proving inadequate and it’s clear that corporations must go beyond compliance to help achieve the 1.5°C target.

Every company needs to measure and understand its climate impact, set science-based goals, develop a mitigation strategy with short-, mid- and long-term roadmaps, and establish a climate advocacy strategy to guide supply chains, customers and stakeholders on their climate journey. Some emission reductions are quick and easy, while others require years of work and large investment. 

At Strive, Vertis’ new climate action consultancy, we help our clients with all these challenges and where required, we support our clients to take responsibility of their footprints via carbon offsetting. The role of global carbon markets is to accelerate the emission reductions and channel financing towards projects that verifiably reduce or sequester GHG from the atmosphere in the most cost efficient and timely manner. As the majority of projects are implemented in developing countries, they contribute co-benefits such as improving local livelihoods through job creation, conserving biodiversity and increasing the use of sustainable agricultural practices. 

It is therefore vitally important that our client investments are credible and have environmental integrity. Established in 1999, Vertis is a pioneer in the carbon markets, helping clients navigate climate policy, the markets and implementing high quality offsetting strategies where internal reductions require time. Our due diligence process assesses credible crediting schemes that ensure additionality, permanence, traceability, transparency and other key criteria for registered projects. We assess the financial and reputational health of project developers and annually review the project integrity as we examine the monitoring and third party audit reports, that are compulsory under each internationally recognised scheme. Our analysis is verified by established, global leaders in method certification such as SGS and Bureau Veritas, who audit our decision making at both the project design and project monitoring stages.

At Vertis and Strive, we believe that voluntary carbon offsetting plays an important role in increasing corporate environmental investment and meeting of the Paris Agreement targets. We are dedicated to bringing finance to projects with verified impacts on climate, biodiversity and communities and we continue to support recognised voluntary carbon schemes such as Gold Standard or Verra, as in our opinion currently they provide the most robust structure for the delivery of credible emission reductions.


CEO, Emergent & Leaf Coalition

The world has an urgent window of opportunity to address the climate crisis. We need to think big, move quickly, and find large scale solutions.

Emergent is a mission-led non-profit dedicated to reversing tropical and subtropical deforestation. Emergent acts as a market intermediary between forest jurisdictions and corporate buyers to facilitate transactions of highest quality emissions credits is a nonprofit working with the some of the largest companies in the world to protect the world’s forests driving large scale financial flows to change incentives on the ground to help make standing forests worth more alive than dead. 

Tropical deforestation accounts for nearly 10% of global greenhouse gas emissions and reversing deforestation can be a significant part of the climate solution. In fact we know that the path to achieving the goals of the Paris agreement runs straight through protection of the world’s forests and ecosystem at massive scale. In other words, there really is no feasible way to achieve a safe climate without dramatically a quickly reversing deforestation in the coming decade. The good news is that nature-based solutions are starting to play an increasingly important role in corporate climate commitments. Emergent works with large corporations that aim to protect nature as part of their climate commitments. We focus on large scale impact by working with forest jurisdictions of whole countries and states, rather than just on individual projects. 

Emergent is also the coordinator of the LEAF Coalition, a public-private coalition launched earlier this year which aims to mobilize large scale finance to protect tropical forests. We launched LEAF launched this past April on Earth Day at the White House Climate Summit where we announced an initial commitment of $1 billion. The goal of LEAF is to bring unprecedent scale of finance to support systemic change in reversing deforestation. We recognize that to address the multiple crisis we face – climate, deforestation, extinction, require – collective action, coordination, and mobilization of the public and private sectors, as well as civil society.

Companies participating in LEAF are committing to first and foremost, reduce emissions within their own operations and value chains, and then purchase emissions reduction credits for emissions they can’t reduce on their own. In this way, LEAF is a high-ambition coalition – companies increasing ambition to climate action, and forest countries increasing ambition to reduce deforestation. 

Currently participating in the LEAF coalition are the governments of the United States, United Kingdom, and Norway – and leading companies including Amazon, AirBnb, Bayer, BCG, Delta Airlines, GSK, McKinsey, PwC, Salesforce, Unilever, Nestle, and Eon.


Policy Officer, Carbon Market Watch

Recently, a mining company in Cumbria said it wanted to make its coal mine carbon neutral by using carbon credits. That is one of the best examples I’ve seen of how not to use carbon offsets. You can’t make your new coal mine carbon neutral. Also, I don’t think there is such a thing as a “carbon neutral” fossil fuel. It’s a bit of an oxymoron.

When it comes to carbon credits, it’s quite tricky for the average consumer to know whether a credit is good or not. They must be careful regarding the quality of the credits and how they’re being used. They need to ask themselves, what am I buying, are they good credits and being used in the right way? 

There are independent agencies like the Gold Standard or Verified Carbon Standards that monitor projects, but just because a credit is issued by those agencies doesn’t mean it’s a good credit.

No programme is perfect. They all issue credits which have a high level of uncertainty and risk of non-permanence (e.g. credits for soil carbon or avoided deforestation). There’s an ongoing disagreement about how to avoid double counting. Standards are relatively transparent, but highly complex. What is not transparent are the transactions, e.g. data about volumes of credits traded and prices. Many projects are overestimating the impact they’re having and issuing too many credits. 

There needs to be a shift in mentality so people understand that buying carbon credits does not fully make up for your carbon footprint, because there is a degree of uncertainty in measuring both emissions and reductions.

The best way of avoiding greenwashing is to start from the idea that whatever credit you purchase, your decisions still have an impact on the climate, and addressing this impact is your best chance of making a difference. But private fliers should not simply rely on offsets, because that’s easy. If the wealthiest actors do not invest in actual decarbonisation of the aviation sector, then who will? For private business aviation, offsetting is a cheap excuse. 

Book your jet with Victor

On-demand private jet charter

Share this Post