The quest for guilt-free travel is on a rocky path.

July 20 – Book a flight with an airline on one of these dates and you may have the option to offset your share of carbon dioxide emissions from that trip. It may be a guilt-free way to fly, but is it a way to reduce emissions?

Tourism is an emissions-intensive industry – responsible for around 8 percent of global carbon dioxide emissions. Since last November’s COP26 Scottish Climate Summit, more than 500 companies have signed up to the Glasgow Climate Action on Tourism Agreement.

What’s more appealing than reducing the impact of travel while contributing to nature or local communities? In theory, each offset represents an amount of carbon dioxide removed from the atmosphere (e.g. by trees) or condemned by, for example, providing cleaner cookstoves, improving indoor air quality and reducing local deforestation. Eliminating or reducing emissions elsewhere will not solve the carbon dioxide entering the atmosphere as a result of your actions.

Criticisms of the voluntary compensation market are well-rehearsed. The issues are focused on providing carbon removals that are beyond what would otherwise happen, and crucially sustainable. This was dramatically illustrated last summer when forest fires burned off the West Coast of the United States, producing offsets purchased by BP and Microsoft.

In May, a report from investment bank Credit Suisse described the voluntary market as a “wild west” with “poor transparency” and “low (if any) correlation between price and credit quality.”

Environmental advocates also claim that offsets would allow companies to delay the deep emissions cuts needed to avoid catastrophic global warming. The Science-Based Targets Initiative (SBTi), which outlines best practices related to climate science, only allows offsets for companies to exceed their science-based or net zero targets.

Adventure travel company Explore Worldwide has gone through a detailed process to measure emissions from all its trips as well as its offices to begin the process of cutting emissions by 50% by 2030. But it’s given the company a head start, says sustainability expert Hannah Methven. “This whole team got it by looking at trips and asking, ‘Is this the best route[or]can I use a different vehicle here?’

Compensation is included in the cost of each trip (except for flights where customers book themselves – a challenge Methven is struggling with), but she sees it as “the bottom of the scale”. “Reduction should be our biggest priority,” he said. And then we want to support startups that are trying to help nature and biodiversity and decarbonize (those).

These include projects from Rewilding Britain and Cold Earth (working to stop deforestation). To offset that, “we’re looking for projects focused primarily on preventing emissions and supporting renewable energy.

Explore is getting its offsets through Climate Impact Partners. European managing director Mark Griffiths insists his company rigorously assesses potential projects to ensure carbon-offsetting claims and, for example, back-up plans are in place in the event of forest fires. It is investing in artificial intelligence and satellite technologies for continuous monitoring. “If we’re promoting something that doesn’t deliver on demand, it’s our reputation that’s at risk.”

According to the Explore website, compensation costs are less than £10 per person, but as demand increases, compensation costs are likely to change, says Methven.

Griffiths estimates offset projects such as clean cookstoves at $6 to $15 per CO2; Mangrove or peatland restoration can cost up to $30 per tonne, while renewable energy projects can attract less than 10 tonnes.

This is in stark contrast to carbon pricing in markets such as the European Union’s Emissions Trading System (EU ETS), which this year paid €96 ($102) a tonne.

And it certainly doesn’t reflect the societal cost of carbon, which is defined as the economic impact of a ton of carbon emissions. The U.S. government uses a figure of $51, and a recent economic study suggested it should be more than $250 per ton, considering heat-related deaths.

Last year, the Forest Trends Ecosystem Marketplace Initiative reported that the voluntary market exceeded $1 billion for the first time, accounting for nearly 300 million tons of CO2. Forest and land credits dominated, followed by renewable energy credits.

Right now, demand outstrips supply, especially for “quality” projects. The reason, Griffiths says, is that companies are beginning to understand what their exposure would be if a tax were imposed on carbon.

So, for those emissions that are difficult to address, they are now willing to pay more. And they are expected. A new focus for carbon markets is the so-called blue carbon. Colombian President Ivan Duque Marquez told the recent World Economic Forum in Davos that a major project in Colombia is to triple the cost of credit to return to $30-40. Two years to fetch over $100 per ton.

Whether or not travelers are prepared to pay more remains to be seen.

According to Credit Suisse Analytics, airlines were among the beneficiaries of offsets prepared for the industry’s Carbon Offsetting and Reduction Program for International Aviation (CORSIA), which aims to ensure that growth in aviation emissions is offset elsewhere.

There is a big difference between different airlines and footprint calculators on how much carbon dioxide is emitted during travel. A quick check of a return flight from London to New York shows anywhere from 0.7 tons to 2.7 tons per person, and a surcharge of $7 to $70 for an economy flight. It is not clear how many projects will reach the ground.

In the past few years, airlines including BA and Lufthansa have been offering customers the option to make their flights more efficient by blending sustainable aviation fuel (SAF), which is three times more expensive than fossil fuels, into kerosene, contributing to carbon emissions. Fuel. From 2025, the EU, through the ReFuelEU aviation initiative, mandates that aviation fuel suppliers (initially) include 2% SAF in aviation fuel at EU airports.

Carbon dioxide is still released when the fuel burns. There is also a concern about the sustainability of using vegetable oils in SAF. But if CO2 is captured from the air or industrial processes and combined with renewable hydrogen to make synthetic or e-fuels, it can reduce greenhouse gas emissions by up to 85%, according to European campaign group Transport and Environment.

Lufthansa and BA have made it clear that SAF is not being added to certain private flights as it can only be offered at certain hubs, but transport and environment aviation policy analyst Reinot Deberg said customers want to know how sustainable the fuel is. It’s a matter of choice, and whether their own flight uses SAF or pushes another fuel.

“What guarantees are there for the customer’s money to buy SAFs? Who tracks the money and who verifies it? How do we know that airlines are not double charging customers by passing the cost of regulations like ReFuelEU onto the ticket price and asking the customer to pay for SAFs? Deberg asks.

Although pure SAF boasts carbon savings of up to 85%, its reduction potential in actual use is much lower, as it is today mixed with 10-50% kerosene.

That question of transparency is an industry-wide issue. The climate impact offsets, he says, are backed by the Gold Standard, a leading standard-setting initiative.

But there is no official international standard – the Voluntary Carbon Market Integrity Initiative (VCMI) is working to fix it. The multi-stakeholder VCMI has developed a draft claim regulation and has begun road testing with some corporations.

In the year By 2020, a group at the UK’s Oxford University has developed offset principles that urge businesses to move to offsets, where carbon is removed from the atmosphere and locked away. This should shift from efforts such as tree planting to long-life storage such as geological storage.

This nascent market is being fueled by deep-pocketed companies including Stripe, Meta and Google parent Alphabet, which have signed on to a new platform called Frontier and pledged to spend $925 million on technology over the next eight years to decarbonize. (read more)

Meanwhile, Griffiths at Climate Impact Partners argues that finance flowing into communities through offsetting mechanisms such as cooking can provide valuable employment, empower women and bring health and biodiversity benefits along the way.

So perhaps, as Carbon Market Watch has argued, instead of offsetting emissions, companies can simply contribute to climate action, bringing tangible benefits to people and the environment.

The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and impartiality under the principles of integrity. Ethical Corporation Magazine, part of Reuters Professional, is owned by Thomson Reuters and operates independently of Reuters News.