"This might just be the world's first truly ethical offseting scheme."
John Grant, Author of The Green Marketing ManifestoLess than one third of money spent on project-based offsets goes to environmental projects
Carbon markets can be complex, and the movement of money through them is not always transparent. We decided to have a closer look at how project-based offsetting works, and have just published research into the Clean Development Mechanism - the biggest source of project-based offsets. The research was reported by the BBC yesterday.
The results show the sheer number of actors involved in the carbon offset supply chain and how money is distributed between them. For every £1 you spend on carbon offsetting, typically 28p goes to the set up and maintenance costs of an environmental project. 34p goes to the company that takes on the risk that the project may fail. The project's investors take 19p, with smaller amounts of money being distributed between organisations involved in brokering and auditing the carbon credits.
If you are buying the credits to offset your carbon footprint voluntarily, the picture will be slightly worse because a retailer also takes a cut.
We think this is not a reasonable level of efficiency (Carbon Retirement, for example, spends at least 85p in every pound on carbon emission reductions) and the system as a whole is losing too much money. Governments buy carbon offsets through the Clean Development Mechanism, and our research underlines the importance of reform for the talks in Copenhagen.
