The first thing to say about John Oliver’s show on carbon offsets is that if you haven’t already seen it, you should. Per usual, Oliver is funny, profane and insightful. He made a complicated topic approachable and understandable. But he also took a lot of swings — and more than once he missed. Here’s our guide to what he got right and wrong.
At the heart of Oliver’s argument is the claim that offsets don’t deliver the emissions savings or carbon removal they’re designed to. On this front, he was right to highlight worrying investigations by Bloomberg and ProPublica. Both publications identified offsets that were sold to protect forests that don’t appear to have been under threat of being logged. In offsets argot, the projects may not have been "additional" and therefore not worthy of funding. Offsetting is in no way perfect, at least right now.
Another home run was when Oliver accused companies of using offsets to obscure the true climate impact of their products. It’s a depressing fact of carbon markets that low-quality offsets, many of which are not additional, can be snapped up for a couple of dollars per ton. These cheap credits pull down the price of other, higher-quality credits and are one reason why the price for carbon credits is often less than the true cost of removing a ton of carbon from the atmosphere. Too many companies buy large volumes of cheap credits and then claim to be carbon neutral. Because carbon markets are unregulated, these claims are rarely audited. Many would fall apart if scrutinized.
The most glaring miss was the overall impression viewers took away from the show: All offsets are flawed. Oliver ignored the sophisticated methodologies and verification processes built up by non-profits, largely without government support, to ensure that a ton paid for means a ton avoided or removed. Mostly done voluntarily without government mandates or resources. There’s a wealth of knowledge and commitment inside the organizations behind these systems, from the scientists and policy experts at methodology developers Verra and Gold Standard to the entrepreneurs behind the exciting startups using technology to track offset quality. The systems they’ve built can’t eliminate bad offsets, but that doesn’t imply that all offsets are bad.
Oliver also left viewers thinking that offsets are only ever used to greenwash, which again ignores what’s actually happening. Many companies follow best practice on offsets — see the Oxford Offsetting Principles, for example — and prioritize science-based emissions reductions above use of offsets. If offsets are used to go above and beyond such targets, the money spent on the credits is not dissimilar to an internal carbon tax: The spending creates an additional incentive to search for further internal emissions savings, particularly as the price of offsets increases.
Rather than leaving viewers feeling that carbon markets are completely broken, Oliver could have pointed to recent initiatives designed to remedy the market’s shortcomings. These include the Integrity Council for the Voluntary Carbon Market, an independent body developing a definitive quality standard for offsets, and the emergence of a slew of startups that provide quality ratings to buyers.
We also need more transparency around offset use. Instead of relying on one-off investigations that shame specific companies and projects, but may not change the market.
These moves have great potential, but they leave holes we would love to see filled. First, the evidence base for offsets urgently needs expanding. There’s not more than a smattering of academic studies on offset performance, some of which raise questions about additionality and other quality criteria. These results are concerning, but they cover only tiny patches of the offsets landscape. Ecosystem Marketplace, a leading source of information on carbon markets, has data on more than 170 credit types from nearly 100 countries. A significant expansion of independent research into the most popular credit types would do much to inform buyers and raise the quality of the market.
We also need more transparency around offset use. Instead of relying on one-off investigations that shame specific companies and projects, but may not change the market, companies should disclose both the volume of credits purchased annually and from which projects the credits were sourced. Such a requirement would be a significant deterrence to any company planning on purchasing low-quality, non-additional offsets, as well as those prioritizing offsets above emissions reductions in meeting net-zero targets.
As a final step to improving carbon markets, we need to talk about penalties. We know that misuse of offsets sets back efforts to tackle climate change. This raises the question of whether and how such behavior should be punished. At present, the risk is purely reputational: No company wants to find itself featured in the next exposé from Bloomberg or ProPublica. Do we need a system with more teeth? If so, who would be charged with assessing bad behavior, demanding remedies and doling out fines?
These aren’t simple questions. It may be that voluntary governance is better than government oversight. But if we want carbon markets to evolve into a system that delivers maximum climate benefits, rather than critiques on primetime television, we need to ask hard questions about how to prevent misuse. And if we can answer those, the industry just might avoid another viral mauling from Mr. Oliver.