Carbon Offset Credits: Not a Punchline

Gabe Plotkin

Carbon offset credits have been in the news a lot lately—and not in a good way. John Oliver mocked some forestry projects for claiming to have saved trees that were never going to be cut down in the first place. A Guardian article claimed that a large percentage of rainforest carbon credits did not represent genuine emission reductions.

This negative attention really concerns me. Not because carbon offset credits are beyond scrutiny—they should be scrutinized. Rather, this negative attention concerns me because it paints with unfairly broad strokes a simplistic view of what is a very complicated, complex, and crucial topic of conversation.

Picking on forestry credits for laughs or implying fraudulent behavior in a particular project may grab attention. But it elevates a single instance of concern into the defining characteristic of an entire ecosystem. Conventional wisdom becomes “carbon projects are laughable,” when the reality is very different. And it all distracts people from the real threat we face – catastrophic climate change – and the critical role that high-quality, high-impact carbon offset projects play in preventing it.

Carbon Credits Are Critical

Here is some news that I want to share, and that I hope will go viral: We will not be able to keep the world from heating to catastrophic levels without companies like Tradewater permanently destroying refrigerants and controlling methane at scale. These “non-CO2” gases have an outsized effect on global warming, and every single path to meeting the Paris Agreement’s goals includes preventing these gases from being emitted into the atmosphere. And the only meaningful money being spent to prevent these gases from being released comes from carbon offset markets.

As Tradewater explained in our recent statement, carbon offset projects, done well, buy us time to transition to a low-carbon economy. They can also pay to solve environmental problems that would otherwise be ignored, while creating jobs and driving innovation along the way.

Who is telling that story? What will it take for John Oliver to make a joke that drives people toward these important solutions? How can we garner the same kind of attention?

The Story of Tradewater’s Refrigerant Carbon Credits

One of the potent greenhouse gases that Tradewater hunts down and destroys is R-12 refrigerant (also known as a CFC). R-12 is a gas that cannot be made anymore. Production was banned under the Montreal Protocol because it depletes the ozone layer. But that production ban also turns out to be key in the fight against climate change because R-12 has the power to heat the planet more than 10,000 times as much as CO2.

Even though you cannot make R-12 anymore, there are hundreds of millions of pounds of this type of CFC gas scattered throughout the world, still in use or sitting in stockpiles. It is slowly leaking into the atmosphere and contributing significantly to global warming. If we let all of it get released, it would lead to more carbon emissions than the annual emissions of the United States and European Union combined.

Despite this, no government body on Earth is working to collect and destroy these gases. None. The United Nations, through the Montreal Protocol, assumes everything produced will eventually be released, and it provides no funding to help countries pay to destroy R-12. The United States, like almost every other country in the world, encourages people to transition to new, less harmful refrigerants, but it does not mandate that companies destroy R-12 at the end of their life or provide any funding to do so. It simply sits silent in the face of this problem.

Enter carbon offset credits.

When California passed its landmark climate bill in 2006, it put a price on carbon emissions and gave a financial incentive for large polluters to reduce emissions. It also created a path for people to “pay” for emissions by buying carbon offset credits from companies that took it upon themselves to fix the problem of R-12 refrigerant that the United Nations and U.S. government were ignoring.

Tradewater was born from this opportunity. Knowing that people would pay us if we found a way to collect these stranded and forgotten cylinders and cans of R-12, Tradewater hired young people and gave them jobs to fight climate change on the front lines. We started to hunt all over the United States, looking for R-12, and developing relationships with freight companies and destruction facilities to safely transport and destroy the cylinders and cans of R-12 that we found.

Our work has had a meaningful impact. To date, in the United States alone, we have collected and destroyed more than 1.2 million pounds of refrigerant gas, preventing the release of more than 5.6 million tons of CO2 equivalent.

What’s more, we have not stopped with the United States. While California limits eligible offset credits to projects located in the United States, our participation in the California program helped us appreciate the scope and scale of this problem globally. It led us to realize that our relationships, know-how, and dedication to this problem, makes us uniquely positioned to take it on.

We have expanded our hunt for R-12 to Africa, South and Central America, Asia, and the Middle East. We have figured out how to collect and safely transport and destroy refrigerants found in backyard sheds in Ghana, technician shops in the Dominican Republic, and old warehouses in Honduras. We have now located R-12 in over 15 countries globally and hired staff on multiple continents to go after it.

We have done all of this knowing that our only path to success is the carbon offset market. It is expensive to hire staff and search the globe for R-12 refrigerants. It is expensive to collect and transport and safely destroy the gas we collect. We spend millions of dollars a year to do this work. And the only funding source available to us at the scale needed to pull it off comes from the sale of the carbon offset credits we generate when we are done.

The Integrity of Tradewater’s Refrigerant Carbon Credits

Among those lampooned and vilified in the John Oliver segment and Guardian article were the buyers of carbon offset credits. The corporations who happened to buy offsets from the targeted projects were named and shamed. This, of course, has a chilling effect.

Most companies today are very serious about their sustainability commitments. They take steps to reduce their emissions and support carbon offset projects because they genuinely want to be responsible stewards of our planet.

But if carbon credits are a joke, or buying them risks being on the receiving end of public ridicule, why would anyone do it? Put another way: if the only narrative that exists is that carbon offsets are laughable, or untrustworthy, then the cylinders and cans of R-12 that we have discovered around the globe will sit and continue to leak.

The Real Punchline

The real punchline is this: the fight against climate change is an existential battle. We need to do everything we can to prevent the release of greenhouse gases and pull carbon from the atmosphere. High-quality, high-impact carbon offset projects – those with the highest degree of additionality, accuracy, and permanence, like Tradewater’s refrigerant projects – are essential in this fight, and they must be encouraged and supported.

Unfortunately, this message is complicated. It does not lend itself to jokes or clickbait. It also requires people to think and learn. There are no shortcuts or simple rating tools that can explain the nuance of these projects and how they are used by corporations and individuals to lead the fight to save our planet. Indeed, if it were easy, we would not be in the mess we are in.

The good news? The thinking and learning required is worth it. We still have a chance to get ourselves out of this mess.

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Permanence

Emission reductions are considered permanent if they are not reversible. In some projects, such as forestry or soil preservation, carbon offset credits are issued based upon the volume of CO2 that will be sequestered over future decades—but human actions and natural processes such as forest fires, disease, and soil tillage can disrupt those projects. When that happens, the emission reductions claimed by the project are reversed.

The destruction of halocarbon does not carry this risk. All destruction activities in Tradewater’s projects are conducted pursuant to the Montreal Protocol , which requires “a destruction process” that “results in the permanent transformation, or decomposition of all or a significant portion of such substances.” Specifically, the destruction facilities Tradewater uses must meet or exceed the recommendations of the UN Technology & Economic Assessment Panel , which approves certain technologies to destroy halocarbons, including the requirement that the technology achieve a 99.99% or higher “destruction and removal efficiency.” Simply put, this means that Tradewater’s technologies ensure that over 99.99% of the chemicals are permanently destroyed. During the destruction process, a continuous emission monitoring system is used to ensure full destruction of the ODS collected.

Accuracy

Some carbon offset projects necessarily rely on estimations or assumptions when calculating the emission reductions from project activities. Forestry projects, where developers make assumptions about the carbon that will be sequestered over future decades if trees are conserved, are a perfect example. Such projects sometimes result in an overestimation of the environmental benefit of the project.

Tradewater’s halocarbon projects avoid the issue of overestimation by consistently conducting extremely precise testing and measurement of the amount of refrigerant destroyed in each project.

  • Every container of ODS that Tradewater destroys is weighed by a third-party using regularly calibrated scales. The ODS is then sampled by a third-party and analyzed by an accredited refrigerant laboratory to determine its species and purity. These two steps combine to ensure that credits are issued only for the precise volume and type of refrigerant destroyed.
  • The destruction facilities that Tradewater uses continuously monitor the incineration process during destruction events to ensure that over 99.99% of the ODS is destroyed. This monitoring is mandated by regulatory protocols and is part of the verification process to which projects are subjected.
  • Tradewater accounts for the project emissions created during the collection, transport, and destruction of ODS, and the number of offsets issued is reduced by a corresponding amount. The protocols that we use also build in other reductions to account for substitute chemicals that will be used to replace the destroyed refrigerants. Tradewater publishes this information in the documentation for all its ODS destruction projects. These documents outline how the material was obtained, the project emissions calculations, the test results, and the amount and type of ODS chemicals destroyed, among other information.

    • Additionality

    It is a basic requirement of all carbon offset projects that the underlying project activities are additional. “Additional” means that the projects would not happen in the absence of a carbon market. Tradewater’s halocarbon projects simply would not happen – and the gases would be left to escape into the atmosphere – without the sale of the resulting carbon offset credits. This is because there is no mandate to collect and destroy these gases. It is still permissible to buy, sell, and use halocarbons that were produced before the ban. There are other reasons halocarbon destruction projects are additional:

    • There are no incentives or financial mechanisms to encourage halocarbon destruction. According to the International Energy Agency and United Nations Environment Program, “there is rarely funding nor incentive” to recover and destroy ozone depleting substances in storage tanks and discarded equipment. And collecting, transporting, and destroying halocarbons is time-intensive and expensive. The burden to collect and destroy these gases therefore remains prohibitive outside of carbon offset markets—meaning that if organizations like Tradewater do not do this work, nobody else will.
    • Countries are not focused on the need to collect and destroy halocarbons. The Montreal Protocol has been celebrated as a success because of its production ban. This success, however, ignores the legacy gases produced before the ban and is a blind spot for government regulators. In the U.S., for example, the Environmental Protection Agency (EPA) developed a Vintaging Model in the 1990s to estimate the quantify of ozone depleting substances left in circulation. Based on the inputs and assumptions put into the model, the EPA predicted that no CFCs would be available for recovery beyond 2020 in the United States. But this prediction did not prove accurate. Tradewater has collected and destroyed more than 1.5 million pounds of CFCs globally in recent years and continues to identify thousands of pounds per week.
    • International carbon accounting standards do not require corporations to measure or track emissions tied to halocarbons, and refrigerants are specifically excluded from Science Based Targets initiative (SBTi) commitments. These commitments derive from emissions reporting under the GHG Protocol, which requires companies to report on emissions only from new generation refrigerants, such as hydrofluorocarbons (HFCs), but does not establish any obligation to report inventories or emissions of refrigerants still in use, such as CFCs and HCFCs. All these factors combine to make Tradewater’s carbon offset projects highly additional. As Giving Green, an initiative of IDinsight, concluded: “Tradewater would not exist without the offset market, so this element of additionality is clearly achieved.” The case for additionality is not so clear for some other project types, such as forestry and landfill gas carbon projects. For example, some forests are already being conserved for their beauty, or for use as parks, and generate carbon offset credits only because those conservation efforts do not yet have full formal protection in place to avoid deforestation in the future. Similarly, methane from landfills can be used to make electricity or captured as compressed natural gas, thereby creating additional revenue streams to support the activities, beyond the sale of carbon credits.