Research Grant
The True Price of Compensated Fossil Fuel Emissions
The 2050 Foundation is conducting a comprehensive investigation into the long-term consequences of voluntary offsets on the overall costs of climate change mitigation. Our preliminary research indicates that the vast majority of existing "climate-neutral" claims merely address 3 to 7 percent of the financial damage future generations will endure. This observation carries profound legal and policy implications.
To advance this critical inquiry, the 2050 Foundation has earmarked 500,000 euros for scientific research and is inviting proposals from universities and research institutions.
The Concern
While the 2050 Foundation acknowledges the importance of offsets and negative emissions in combatting climate change, we are deeply troubled by questionable claims of carbon or climate neutrality when utilizing (voluntary) offsets to offset CO2 emissions from fossil fuels.
The terms "neutral" and "compensation" imply that no harm is being inflicted upon future generations, thus justifying continued emissions by climate-conscious individuals and businesses. These voluntary offsets enable enterprises to market their environmentally damaging practices as sustainable, stifling innovation and influencing policymakers and consumers.
Impact on Emissions
The behavioral consequences stemming from the existence of voluntary offsets lead to an evident increase in fossil fuel emissions and hinder the necessary reductions required to address climate change. Often, these compensated emissions fail to fully offset the damage to the climate and future generations.
Challenging Offset Methods
Numerous authors and organizations have already raised concerns about the effectiveness and additionality of many land-based offset methods. Frequently, the CO2 extracted from the air through offsetting falls short of projections, and these extractions may have occurred even without offsets. In essence, existing literature demonstrates that compensated emissions often contribute to a net increase in greenhouse gases in the atmosphere and cannot genuinely be considered neutral. Certification bodies have taken limited measures to address these concerns, thereby maintaining the perception that compensated offsets do not harm future generations.
Cost Perspective
Moreover, our preliminary research at the 2050 Foundation highlights the limited capacity of inexpensive offset methods, a factor that must be taken into account when evaluating claims of carbon neutrality. Using low-cost offsets today depletes their availability for future generations, thereby increasing their costs for climate change mitigation. From this cost perspective, our research indicates that current users of cheap offsets typically cover only about 3% to 10% of the total costs, leaving the remaining costs and damage to be borne by future generations. This starkly contrasts with the notion that compensated emissions can be deemed "neutral" or that damage is truly "compensated."
A Potential Net Negative Effect
Given the behavioral effects and the failure to fully compensate for future damage, it is plausible that the existence of today's voluntary offsets may have a net negative impact on mitigating climate change. The global community might be relying on incorrect metrics concerning the genuine (true price) of neutral or compensated emissions, hindering the formulation of effective policies. Insight into the true cost of compensating all emissions-related damage could influence the behavior and sustainability strategies of millions of enterprises, thousands of NGOs, and up to a billion consumers today.
Scientific Validation and Research Consortium
Validating this insight necessitates scientific rigor. The 2050 Foundation, in collaboration with experts and universities, is forming a research consortium with the following objectives:
To advance this critical inquiry, the 2050 Foundation has earmarked 500,000 euros for scientific research and is inviting proposals from universities and research institutions.
The Concern
While the 2050 Foundation acknowledges the importance of offsets and negative emissions in combatting climate change, we are deeply troubled by questionable claims of carbon or climate neutrality when utilizing (voluntary) offsets to offset CO2 emissions from fossil fuels.
The terms "neutral" and "compensation" imply that no harm is being inflicted upon future generations, thus justifying continued emissions by climate-conscious individuals and businesses. These voluntary offsets enable enterprises to market their environmentally damaging practices as sustainable, stifling innovation and influencing policymakers and consumers.
Impact on Emissions
The behavioral consequences stemming from the existence of voluntary offsets lead to an evident increase in fossil fuel emissions and hinder the necessary reductions required to address climate change. Often, these compensated emissions fail to fully offset the damage to the climate and future generations.
Challenging Offset Methods
Numerous authors and organizations have already raised concerns about the effectiveness and additionality of many land-based offset methods. Frequently, the CO2 extracted from the air through offsetting falls short of projections, and these extractions may have occurred even without offsets. In essence, existing literature demonstrates that compensated emissions often contribute to a net increase in greenhouse gases in the atmosphere and cannot genuinely be considered neutral. Certification bodies have taken limited measures to address these concerns, thereby maintaining the perception that compensated offsets do not harm future generations.
Cost Perspective
Moreover, our preliminary research at the 2050 Foundation highlights the limited capacity of inexpensive offset methods, a factor that must be taken into account when evaluating claims of carbon neutrality. Using low-cost offsets today depletes their availability for future generations, thereby increasing their costs for climate change mitigation. From this cost perspective, our research indicates that current users of cheap offsets typically cover only about 3% to 10% of the total costs, leaving the remaining costs and damage to be borne by future generations. This starkly contrasts with the notion that compensated emissions can be deemed "neutral" or that damage is truly "compensated."
A Potential Net Negative Effect
Given the behavioral effects and the failure to fully compensate for future damage, it is plausible that the existence of today's voluntary offsets may have a net negative impact on mitigating climate change. The global community might be relying on incorrect metrics concerning the genuine (true price) of neutral or compensated emissions, hindering the formulation of effective policies. Insight into the true cost of compensating all emissions-related damage could influence the behavior and sustainability strategies of millions of enterprises, thousands of NGOs, and up to a billion consumers today.
Scientific Validation and Research Consortium
Validating this insight necessitates scientific rigor. The 2050 Foundation, in collaboration with experts and universities, is forming a research consortium with the following objectives:
- Insight into Remaining Financial Damage: Assess the remaining financial damage for future generations when using limited-capacity, low-cost offset methods on a one-to-one basis.
- Conditions for Claiming Neutrality: Determine the conditions that must be met to claim neutrality (and complete compensation of total damage) when using such offset methods today.
- Optimal Allocation and Strategy: Examine the optimal allocation and strategy for funds across various offset methods, considering their effectiveness, capacity, and the timing effects of CO2 emissions and extractions.
- Behavioral Effects: Analyze the behavioral effects on consumers and companies resulting from the option to compensate emissions at minimal cost.
- Legal Consequences: Explore the legal consequences of asserting "neutrality" when actual damage remains uncompensated, including the possibility of initiating class-action lawsuits in various jurisdictions to compel companies that sold "climate-neutral" products to retroactively compensate for remaining damage.
This amalgamation of insights is aimed at creating a world where claims of "climate neutrality" no longer harm future generations. All deliverables, including software, will be shared as open source to encourage and enable others to continue this crucial research.
The 2050 Foundation has committed 500,000 euros to support the initial phase of this research and remains open to additional investments. Please contact us for further details on the grant application process and criteria.