Fact-Checking: The Advantages and Limits of CO₂ Compensation

Whether visible or not: our everyday life has consequences for the climate. Consequences that have to be balanced or avoided completely. That’s exactly what CO₂ compensation does. Today you will find out what CO₂ compensation is, what’s needed for it to be successful, and how PLAN3T partners with compensation projects.

The underlying principle of CO2 compensation

We produce CO₂ every day with almost everything we do. Some of the things we do are more harmful to the climate than others. Already now, there are so many alternatives to reduce CO₂ emissions: green electricity, plastic-free shopping, clothing exchange platforms, and many more. However, these sustainable alternatives, unfortunately, don’t exist for all aspects of our life yet.

As a matter of fact, our everyday life has consequences that damage the climate due to CO₂ emissions. And that's exactly why some organizations have thought about how this damage can be compensated. Of course, it's not just about offsetting air travel, which is usually cited as the first major climate sin, but also about any other activities in our everyday life that produce CO₂.

Compensation generally means that the amount of harmful CO₂ emitted during a certain activity is saved elsewhere. For instance, by installing new energy sources and sanitary facilities, more efficient cooking facilities in countries in the global south, or tree protection projects in tropical rainforests.

An example: A flight from Hamburg to Istanbul is 4,068 km and emits 1,528 kg of CO₂ into the atmosphere. You can't make up for this amount of CO₂. The emission will happen and will be bad for the environment. The good news: you can invest in a compensation project that works to ensure that the same amount of CO₂ is saved elsewhere in the global south.

A case study: energy-efficient cooking bags in Cameroon

Let’s look into the Kabidou family as a use case for this example. The family lives at the foot of Cameroon Mountain in Buea. In this region, only a few families have access to electricity, which is why firewood is mainly used for cooking on a so-called three-stone fire, i.e. an open hotplate.

This is really harmful, for both environment and residents. The heavy smoke exposure from this traditional cooking method can cause eye irritation and respiratory problems. In addition, the consequences of climate change and the overexploitation of local wood resources also endanger their livelihoods.

For these reasons, compensation providers, like our partner Klima Kollekte have made it their business to support the use and distribution of energy-efficient cooking bags with compensation donations. These enable the food to be cooked gently in a closed container and thus reduce the time spent in front of an open fire and also have up to 60% less wood consumption, which saves local wood resources.

Sounds like we’ve solved all the issues, right?

Sadly no, not quite ... We still need to act beyond CO₂ compensation and take its limitations into account.

It may sound like CO₂ compensation is a win-win solution for everyone involved and the environment. Why not just offset your own “bad” CO₂ account abroad and forget the worries of climate change?

The problem is, that we in Europe could drastically reduce CO₂ emissions in the Global South with compensation payments or government development funds, but our own footprint remains unchanged. According to the Federal Environment Agency, the German average in 2017 was 11.6 tonnes of CO₂ equivalents per year. That is a lot. And at the same time, it’s basically impossible to offset all our emissions abroad. Just imagine that China, the USA, and Europe alone emit over half of the world's greenhouse gases

This is why CO₂ compensation can never be the only solution. Nevertheless, we shouldn't write it off because it can be our helper on the way to climate neutrality. In this way, indispensable emissions for which there is still no technological alternative can be offset.

CO₂ compensation with the PLAN3T app

With our app, we want to help reduce CO₂ emissions in three steps: 1. Understand, 2. Reduce, 3. Compensate.

Understand: PLAN3t has in-app challenges to inform you about the most important climate facts and life hacks in a clear and concise manner. In this way, you will understand how easy it can be to reduce your own CO₂ footprint step by step. The challenges are your gamified guide to making a big long-term change with small changes.

Reduce: We'll help you turn your everyday life upside down bit by bit and weave small, CO₂-reducing habits into your everyday life. For example, if you consume less meat from factory farming or even switch to a vegan diet, you can drastically reduce your own CO₂ emissions.

Compensate: We also know that there are some areas of your life that cannot be turned upside down so quickly. That is why CO₂ compensation completes the puzzle as the third component and offers a way of neutralizing unavoidable emissions.

The PLAN3T team knows that there are many people like you who want to make their everyday lives more sustainable. With the app as a guide, we can all make an important contribution to our future every day by understanding, reducing, and ultimately compensating for the remaining CO₂ footprint.

How we choose our compensation partners

The main criteria were crystal clear to us: Our future partners should demonstrate the highest possible standards that guarantee that the project will have a maximum effect on the climate and that the financial contributions of the intermediaries will remain minimal.

The right compensation seals

Similar to the flood of organic seals in the supermarket, there are countless certifications for climate protection projects. After some dispute, two seals stood out for us: The UN's Clean Development Mechanism (CDM) and the Gold Standard from WWF and other environmental organizations.

The CDM scores particularly well in the areas of transparency, calculation, and verification of emissions. This means that precise measuring methods are used and the qualification of the project reviewer is guaranteed.

The Gold Standard shines in terms of sustainable development and respect for local human rights. The seal was founded in 2003 to compensate for the weaknesses of the CDM. The Gold Standard projects have been heavily adapted to the SDGs since the UN climate conference in Paris.

An important criterion for planning a development project is additionality. This means that the project can only be realized with the additional financing of the compensation, without which it would not be possible. This is where the CDM and Gold Standard perform best.

Also decisive: the price. The costs for one ton of CO₂ differ significantly between the providers. The price range can be between 5 and 80 euros. These differences stem from the scope and quality of the certification as well as the type and location of the project. Highly certified projects are simply more expensive since the calculation and verification by an independent auditor are much more complex. This may seem daunting at first, but it’s an important feature of good projects that guarantees aspects of additionality, transparency, and independent reviews.

At this point, a little honest insight: our Gold Standard projects cost between 23 and 36 euros per ton of CO₂.

One shortcoming of the Gold Standard is, that there are only few projects in the Global North. As many of our users wish to compensate through local projects, we selected the most effective compensation projects in Germany. These turn out to be projects dedicated to the renaturation of moors, as they provide for effective sinks for greenhouse gases. However, saving one tonne of CO₂ costs up to four times as much as most projects in the Global South.

Our basic goals

So we looked around for compensation partners who offer at least one of the two seals and operate as a non-profit organization. Furthermore, our future partners should make it clear on their website that avoiding emissions is a top priority. Compensation should only be considered as the last step, not the first.

On the technical side, we wanted to make offsetting as simple and user-friendly as possible, so that you can donate directly in the app and receive Planet Coins as a reward.

After numerous discussions with various compensation partners, we became aware of one thing: We want to offer our users the widest possible range of the world's most effective projects. From biogas plants in India, plastic recycling in Romania to solar energy in Tanzania, you should be given the opportunity to find your own favourite project. In order to guarantee this, we decided to only cooperate with non-profit compensation providers. This enables us to ensure that the greatest possible benefit for people and nature is created.

Let us summarise: Simply offsetting emissions is no solution to climate change. CO₂ offsetting only reduces the ecological footprint in the Global South. Emissions in the Global North will remain unchanged if we don't act.

If we look to the future, CO₂ offsetting will become obsolete in the long term. If we manage to achieve our goal of 3 tonnes of CO₂ or less. Realistically, however, this will only be the case in the next 15 years. Until then, CO₂ compensation will remain an important part of our mission on the way to the 1.5-degree target. So let’s compensate for the emissions we cannot avoid.