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Climate change and energy

The University of California has all but dropped carbon offsets—and thinks you should, too

It uncovered systemic problems with offset markets and recommended that the public university system focus on cutting its direct emissions instead.

November 30, 2023
a composition with photographs and graph paper, divided into two parts. On the left are stacked cut logs and a forest of trees; on the right the sun streaking across the campus at UC Berkeley with students walking across the quad. A graph line goes to a baseline as it travels to the right.
Stephanie Arnett/MITTR | Envato

In the fall of 2018, the University of California (UC) tasked a team of researchers with identifying tree planting or similar projects from which it could confidently purchase carbon offsets that would reliably cancel out greenhouse gas emissions across its campuses. 

The researchers found next to nothing.

“We took a look across the whole market and did deeper dives into project types we thought were more promising,” says Barbara Haya, director of the Berkeley Carbon Trading Project, housed within UC Berkeley’s Center for Environmental Public Policy, who led the effort. “And we came up almost empty.”

The findings helped prompt the entire university system to radically rethink its sustainability plans. In July, UC announced it would nearly eliminate the use of third-party offsets, charge each of its universities a carbon fee for ongoing pollution, and focus on directly cutting emissions across its campuses and health facilities. 

Now the researchers are sharing the lessons they learned over the course of the project, in the hopes of helping other universities and organizations consider what role, if any, offsets should play in sustainability strategies, MIT Technology Review can report. On November 30, they will launch a website highlighting the array of problems they found, the strict standards they helped set for UC’s offset purchases, and the methods they developed for scrutinizing projects in voluntary carbon markets. 

The University of California is a huge and influential public research system encompassing three national labs and 10 campuses, including UC Berkeley, UC San Francisco, and UCLA. Its commitment to replacing natural gas plants and other polluting infrastructure across the state highlights a model that other universities, organizations, and even cities could and should follow, says Holly Buck, an environmental social scientist at the University at Buffalo. And the fact that it has taken such a strong stance on offsets marks another blow to battered carbon markets.

The basic promise of offsets is that individuals or organizations can balance out their own greenhouse gas pollution by paying others to grow trees, halt logging, or take other steps that may reduce emissions or pull carbon dioxide out of the atmosphere. But a mounting body of studies and investigative reports has found that these projects can dramatically exaggerate the climate benefits in a variety of ways, often amounting to little more than greenwashing. 

The growing criticism is taking a toll. Recent data shows that demand for offsets is falling, as are prices for future contracts, a commitment to buy offsets at a set price at a later date, as some companies rethink their reliance on them. But many corporations and nations alike continue to bank heavily on the promise of offsets. Indeed, the subject will be a hot point of debate at the COP28 climate conference that kicks off November 30 in Dubai, where national negotiators will haggle over the standards for a UN-run global carbon trading market.

Haya, who has highlighted issues with offsets for two decades, says she sees three main takeaways from the research project, which she lists in order of priority: Don’t buy carbon offsets; focus on cutting emissions instead. If you must use offsets, create your own. If you can’t create your own, scrutinize the options in the marketplace very carefully and commit to only buy trustworthy ones.

But that third option “is a hard path to take,” she says, “just because of the poor quality on the market today.”

Direct cuts

In 2013, the University of California pledged to achieve carbon neutrality across its campuses and health centers within 12 years by shifting to emissions-free vehicles, building renewables projects, and undertaking similar efforts. But reaching that goal would have also required significant purchases of offsets through carbon markets. 

Students, faculty, and campus budget officers raised concerns about the institution’s plan to rely on and invest so heavily in such an unreliable climate tool. In response, the UC’s Carbon Neutrality Initiative set up the UC Carbon Abatement Committee, which worked with staff, students, and faculty from each campus to establish the institution’s purchasing standards and to identify the types of projects that could meet them. The initiative also provided funding for a dedicated research effort, led by Haya, exploring these questions.

But finding projects that met even the basic standards of reliability proved so difficult that the researchers ultimately drew a larger lesson from the work, says Camille Kirk, who was previously the director of sustainability at UC Davis and co-directed the research effort along with staff at the UC Office of the President.

“You can’t buy your way out of this,” says Kirk, now head of sustainability at the 

J. Paul Getty Trust, one of the world’s richest arts institutions. “Ultimately, it’s just better if you invest in yourself, invest in your infrastructure, and do the direct work on decarbonization.” 

That philosophy is, more or less, what’s now playing out across the UC system.

Based on the Carbon Abatement Committee’s findings, increasingly pointed criticisms of offsets, and tightening California climate targets for state agencies, UC ultimately opted to rewrite its sustainability plan. 

This summer, the university system dropped its 2025 target, after concluding it would have needed to use offsets to address more than 50% of its emissions reductions. Those purchases would have cost the system $20 million to $30 million annually.

“We were not able to get to a point where we had enough confidence that we could procure the volume of offsets we would require to meet our goal, with offsets that would meet our minimum quality requirements,” says Matt St.Clair, the UC Office of the President’s chief sustainability officer.

UC’s goal now is to clean up its carbon footprint by 2045, almost entirely by directly cutting emissions. The system’s updated policy on sustainable practices notes that every campus will now need to charge itself a $25 carbon fee for every ton of ongoing carbon pollution.

That money must be used to cut greenhouse gas pollution, or to support climate justice or community benefits programs. The carbon price will tick up by 5% each year starting in 2026.

The University of California says it has already cut carbon pollution 30% below 2009 levels, through energy efficiency improvements, the construction of more than 100 on-campus solar projects, and similar steps. It has also set up its own utility to purchase clean electricity from solar, wind, and hydroelectric projects.

Funds from the carbon fee will be used to accelerate these efforts, with a particular focus on replacing on-campus natural gas turbines, which produce 80% of the system’s emissions.

Under UC’s revised plan, offsets can only account for up to 10% of the total reductions by 2045. In addition, any projects must adhere to the strict criteria the committee developed, and they must remove carbon from the atmosphere rather than simply prevent emissions.

One way the university system has opted to control quality is to develop its own offset projects, enabling it to direct university funds to faculty and students while ensuring greater confidence that the projects would meet the institution’s standards and values. Indeed, another goal of the Carbon Abatement Committee was to help kick-start UC-initiated projects, in part to explore and test new approaches. 

In March 2019, UC issued a request for ideas to students and researchers across its campuses. It received 80 proposals and has since provided pilot funding for 12 projects, including: a UC Santa Barbara effort to provide households in rural Rwanda with cookstoves that are cleaner and more efficient than their standard means of cooking, potentially cutting greenhouse gas and indoor air pollution; a UC Davis project designed to reduce methane emissions from rice farming in California’s Central Valley by draining the fields at certain points; and a UCLA effort to convert carbon dioxide captured from power plants or industrial facilities in concrete.

As an outside observer, the University at Buffalo’s Buck says she’s eager to see the results from these pilot projects, noting that rigorous, peer-reviewed studies of such efforts could help improve the field’s understanding of what works.

“It’s pretty well demonstrated that the open market approach isn’t generating that knowledge,” she adds.

Carefully vet

But not every organization has the reach and resources to build its own projects, and even UC may not be able to clean up all its lingering emissions through such efforts.

In its effort to identify more reliable project types, the UC research group formalized an approach that it calls “over/under crediting analyses.”

Here’s how it works: Methods for estimating climate benefits of projects will sometimes exaggerate and sometimes discount them. In practice, though, it’s far more often the former—and there are a common set of ways in which the problems frequently arise.

Take forestry offsets. Researchers have shown that the methods for awarding carbon credits often overestimate the levels of logging that would have occurred without the programs, as when conservation groups earn and sell carbon credits for preventing logging in forests they’ve already pledged to preserve.

Programs can also discount the degree to which a timber company may increase harvesting to make up for the supply-demand gaps when another landowner commits to halting logging for carbon credits. Or added carbon gains may simply not last long enough to matter much from a climate perspective, as when wildfires blaze through project areas.

The UC Berkeley group analyzes offset project types with those known problems and others in mind, then strives to calculate whether the offset program’s methods will undercount actual carbon benefits enough to more than make up for any likely overcounting. If the projects pass that test, the results must then be reviewed by at least two independent researchers or go through a formal peer review process at a scientific journal.

In September the largest certifier of carbon offsets, Verra, provided a point-by-point response to a related study by Haya and colleagues that found four of its most widely used methods for forestry offsets dramatically overestimated the carbon benefits.

Verra stressed that it has spent the last two years updating its methods in ways that address most of the concerns and recommendations. The organization added it is committed to transparency and welcomes academic scrutiny. 

Passing the test

If offsets are so often so bad, why bother with them at all? Why would UC even use them to address up to 10% of its climate pollution in the end?

One argument is that some sources of emissions will continue to be difficult to eliminate directly for a long time to come, like those from air travel and cattle digestion. Offsets may create a mechanism for funding projects that do counteract such pollution, and even provide other important societal or ecological benefits, when they are done right.

Take the example of cookstoves. Using the under/over analysis, UC Berkeley researchers found the existing methods for evaluating the impact of giving households cleaner cooking devices exaggerate the climate benefits between six and nine times, on average. But they also noted that if the programs are carried out carefully, with conservative assumptions and stoves that run on very low polluting fuels, they could both cut greenhouse gas emissions and help save some of the millions of people who die annually from household air pollution.

Haya hopes their work will encourage organizations that manage offsets programs and the regulators who oversee them to embrace the sorts of assessment methods they have developed. After all, amid the widening criticisms it’s imperative that these groups transform their approach if they hope to restore faith in the market, she says.

But given the long track record of problems, she argues, it’s better at this point for universities and other potential buyers to spend their money on cutting emissions instead—and to think of purchasing offsets as an act of charity that might do some added good in the world.

“See it as a donation, as a contribution, but not as a quantified, certified ton of emissions reductions,” she says. “We need to move away from the whole idea of offsetting. You can’t fly and drive and burn fossil fuels, and then pay someone else to do something and say you didn’t have an impact.”

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