Written by Nicholas Roberts for the 27th of November 2020 Edition of Penguin News, headline: “Falklands Conservation examines Carbon Offsetting Scheme potential.”

A scoping study for potential carbon offsetting schemes in the Falklands was released by Falkland Conservation. Nick Roberts talked to Conservation Manager Dr Andrew Stanworth.

Carbon offsetting schemes allow individuals or companies to trade in ‘carbon credits’ - non-physical representations of a metric tonne of carbon dioxide (CO₂) absorbed (or sequestered) by an  environmental project somewhere in the world. Project owners such as solar or wind energy developers, or restorers of peatlands, for example, register their project as a carbon offsetting scheme and earn a carbon credit for every tonne of CO₂ which is sequestered. These carbon credits can then be purchased by companies and individuals who want to compensate for the greenhouse gases they emit.

On a personal level a household can purchase carbon credits to offset the CO₂ they emit (median UK household emissions are 17.1 tonnes per year, worth £268.64, based on the global average carbon credit cost of £15.71 in September) or offset specific activities, such as a flight abroad (an economy-class return flight from London to New York emits an estimated 0.67 tonnes of CO₂ per passenger, £10.53). Companies can gain recognition for being carbon neutral, or carbon negative - meaning they have either offset all the greenhouse gases they emit, or offset even more, respectively. To do so they must have an approved third party work out their total output and provide them with a ‘carbon budget’ which they aim to offset by making purchases in local or overseas carbon offsetting schemes and reducing their output.

There are also cap and trade policies, such as the EU Emissions Trading Scheme (ETS) which sets a maximum allowable level of carbon emissions which reduces over time. Companies who generate more greenhouse gases than their maximum allowable level are fined or earn credits if significantly below.

The alternative to the cap and trade model is voluntary schemes, which allow companies or individuals to offset the carbon they produce for ethical reasons, or to meet Corporate Social Responsibility goals. Certification bodies ensure that the schemes are addressing issues which may lessen the effect of their credits. The body then ensures that the carbon sequestering project has resulted in the reduction/removal of emissions and then permits the selling of a number of credits based on the cost of the carbon reduction. The buyer of these credits from the voluntary scheme can then either ‘retire’ the credit(s) to offset their carbon emissions or trade the credit onwards on the market.

Dr Andrew Stanworth, Conservation Manager, said small voluntary carbon offsetting type projects have already been underway in the Falklands. Projects such as tussac planting on Middle Island involved local company Georgia Seafoods, who had a desire to look at carbon offsetting and invest locally to negate some of the environmental impacts of their work. Similar approaches involved the cruise ship industry, he said, where money was donated for tussac to be planted on Hummock Island.

The question of whether carbon offsetting is an effective measure to deal with pollution has been hotly debated. The writer George Monbiot famously compared carbon offsetting, in its early days, with the middle-ages Catholic church practice of selling ‘indulgences’, where absolution from sins and supposed release from purgatory would be given in exchange for financial donations to the church, allowing the rich to feel better about their behaviour without changing. This criticism has been met with a range of responses, not least that it is unfair and inaccurate. Dr Stanworth described that both voluntary and cap and trade schemes have methods of ensuring the effectiveness of carbon offsetting. Cap and trade schemes ultimately use financial drivers, in that the less greenhouse gas you emit the more you can trade, also reducing the carbon budget of the entity signed up to the scheme over time.

The voluntary market (such as would most likely be able to function in the Falklands), on the other hand, functions through credits being verified and then sold on an open market.

Dr Stanworth made no suggestion of Carbon Offsetting being the ultimate solution to pollution and climate change, however, and made a comparison of selling paint, saying: “Most people will use it to decorate, but a very small proportion will use it to paint slogans on walls,” stating “it’s the policies and mechanisms which can be put in place, such as verification schemes, and the choice of who to sell credits to, as well as information put out with the credits, that can reduce the misuse of the credits.”

Verification schemes register credits so they are fully traceable, and it is ensured the offsetting schemes sequester gases in the way they claim to through monitoring and confirmation of additionality, permanence and lack of leakage of the carbon sequestering.

Additionality means a credit is only issued if the carbon sequestering would not have otherwise happened, for example in the Falklands work would have to be done to recover peat bogs, or plant tussac; permanence means the material which sequesters the greenhouse gases cannot be removed and the carbon sequestering must continue indefinitely; leakage says that where carbon sequestering occurs it cannot cause an increase in carbon emissions outside of the project. For example a project cannot receive credits for lowering grazing intensity on one piece of land only to increase grazing on other areas of land outside of the project, leading to erosion and carbon losses.

The benefit of carbon credits being verified is their value is increased, and can be purchased, “off the peg,” as Dr Stanworth referred to it, enabling ease of sale and confidence in the purchase.

Speaking about the potential for a Carbon Credit Scheme in the Falklands, Dr Stanworth said it would take significant work to set up a scheme which would have enough additionality, permanence and lack of leakage to be of value to the islands, but it could have significant effects if achieved.

“Our initial assessment suggests that the maximum carbon offset potential from peatland restoration in the Falklands could be high, in the region of a million tonnes of CO₂ equivalent per year. Based on the UK government’s shadow price for carbon, this could generate revenue of around £47 million per year for carbon offsets.”

The main method for generating carbon credits in the Islands would likely be through peatland restoration. Peatlands are very effective at sequestering CO₂, and therefore have great potential for Carbon Offsetting Schemes. In the Falklands there are peatland areas which are either eroding or have dried out through ditch digging – and so have begun emitting CO₂ during their degradation instead of sequestering it.

By replanting eroding peatlands, or re-wetting them, their function can be restored, as a minimum reducing their emissions (a saleable credit as avoided emissions) or start sequestering again. This would allow the generation of credits, encouraging large scale restoration of habitats.

As well as Market Schemes, such as have just been described, there are Government Schemes, where governments set national carbon budgets – calculated by all emissions generated in a territory, excluding international aviation and shipping, without the use of international offsets – with the intention of incentivising governments to reach carbon neutrality or negativity. For example, the UK has set a target of net zero emissions by 2050. Due to this the UK Government is proposing to incentivise nature-based carbon reductions by agreeing to purchase Woodland Carbon Code credits to stimulate the market for afforestation and encouraging land use practices which sequester carbon through a new Environmental Land Management scheme. UK farmers will essentially have to show they are sequestering carbon to receive government farming subsidies in a concept named “public money for public goods” which will also extend to increasing biodiversity.

A local Carbon Offsetting Scheme could likely be based in peat and tussac restoration in the islands through “changes in landuse and management ranging from active restoration to more passive activities such as reducing grazing pressure,” the report says. Erosion control of peat which has been exposed through high grazing pressure or bad weather is noted as effective in preventing carbon loss and reducing CO₂ emission. It’s achieved by re-seeding, fertilisation and lime addition to add a ‘nurse crop’ of grasses to encourage bog species to re-establish, though these methods have been expensive.

Also noted is the rewetting of bog areas, as drainage of peat for agriculture and forestry have been the dominant cause of carbon loss in the UK. Rewetting through filling ‘buffalo ditches’ – which were dug in the 1950s and 60s to drain boggy areas to improve grazing and ease travel, is highlighted as an example of how this could be done locally, and it was noted rewetting was “the major form of emissions mitigation considered,” in major UK methodology reports and projects.

Due to potential challenges in implementing a carbon offsetting scheme in the Falklands the report states future requirements to support the implementation would be: “Further research defining a baseline case of the carbon emissions from Falkland peat in a ‘business as usual’ scenario over the next 100 years, and research on the impact of different restoration interventions on these carbon emissions and their risks of failure, so potential credits can be quantified.”

The Conservation study concludes: “Once these have been completed, the funding mechanism for further restoration should be chosen. Key to this consideration will be the proportion of peat that could be restored in an economic manner, access to local or international markets, development of a long‐term governance structure, the availability of carbon financing upfront and local environmental legislation.”

Nicholas Roberts