Rampant wildfires. Mass flooding. Extreme temperatures. We are witnessing a planetary crisis unfold in real-time. Every passing moment reveals a more pressing need for change. Reducing greenhouse gas emissions is the most crucial component in the fight against climate change with many organisations and governments confronting their own role in perpetuating the fossil fuel economy.
The problem is that we have left it too late, and we can’t reduce emissions fast enough. The science is clear, if we are going to have a fighting chance of staying below 1.5 degrees, the ‘safe limit’, we’re going to need to invest in both carbon reduction and carbon removal projects.
When thinking about carbon offsets, most people immediately think of tree planting and reforestation. Yet, the carbon market is becoming increasingly diverse, with carbon offsets including nature-based projects, renewable energy projects and even community-based projects. The purpose behind this content piece is to help you develop your offset strategy, guiding you through the key decisions when it comes to biological versus technological offset solutions.
What is the difference between biological and technological projects?
- Biological solutions (aka nature-based) – These include projects that sequester carbon in the biosphere by causing or accelerating natural processes. Through photosynthesis, plants can remove carbon dioxide from the atmosphere and store it as long as they live. Many nature-based solutions, such as afforestation, are well-established, whilst other areas such as blue carbon are less developed. Take mangroves for example. Mangrove forests not only provide habitats for fish, they also provide protective natural barriers and solutions against strong storms, floods and erosion. They filter water, provide food and timber resources to coastal communities, and can store huge amounts of carbon. Conserving and restoring these ecosystems allows people and nature to thrive, all the while reducing risks posed by the climate crisis. By working with nature and changing how we use the land, researchers from The Nature Conservancy estimate that we can reduce emissions by up to a third of what is needed to meet the goals of the Paris Agreement. Mangroves aren’t alone in their value. Grassland and savannas provide homes for wildlife and help capture and store carbon.
- Pros: Biological solutions often have sizeable co-benefits to nature and people; positive impacts of projects go beyond direct GHG emission reductions. This can touch many areas including education, community, biodiversity, and economy. For example, reforestation projects can reverse biodiversity loss and provide local jobs. Moreover, these tend to be less costly than technological solutions.
- Cons: However, biological solutions can be open to risk of reversal or leakage through extreme weather events and/or man-made threats (such as future deforestation). Further, forests do not grow overnight – biological solutions may take many years to durably remove carbon. There are also land and water availability limitations, which may render such projects increasingly difficult.
- Technological solutions – these include projects that reduce emissions or remove carbon from the atmosphere using non-biological processes. Industrial processes are used to remove atmospheric carbon dioxide for capture, storage, or both. Carbon capture technologies are receiving a lot of attention. Exxon Mobil and Global Thermostat announced an expanded joint development agreement to advance and bring to scale breakthrough technology that removes carbon dioxide directly from the atmosphere. Last year, Elon Musk offered a $100 million prize for the best carbon capture technology. International governmental support of the industry is also growing with US Congress authorising nearly $450 million to be used over the next five years in the research and demonstration of large-scale carbon removal.
- Pros: These often have greater storage permanence. As such there is a possibility to use the stored CO2, for example in industrial processes. Land requirements are small and technological solutions allow for a greater level of monitoring.
- Cons: Technological solutions are nascent, can be energy-intensive, and (apart from renewable energy) are currently much more costly. A 2021 study by Microsoft found that direct air capture is more than 50 times the cost per metric ton of most natural climate solutions, such as planting trees or sustainable farming practices. Moreover, of the technological solutions, only renewable energy is widely available. The other solutions will be important, but have not yet been proven commercially, or widely deployed at scale.
In our previous blog post, we elucidated the difference between reduction and removal projects – biological and technological solutions span across both:
Examples of biological and technological solutions
Technological or biological? The Avieco view
There is no best practice preference for biological or technological solutions. Whichever approach is taken however, organisations need to ensure they have the right stewardship, monitoring and management activities in place to minimise potential storage or societal risks and maximise co-benefits. These should be factored into programme and project design.
Companies should consider the following elements to frame their decision making and ensure their offsetting strategy aligns with company values:
1. What co-benefits align most with your company values?
The benefits of some projects go beyond emissions reductions and may influence an organisation’s choice of which projects to invest in. For example, biodiversity co-benefits often stem from biological projects, whilst technological projects tend to spark innovation and R&D investment.
However, companies should keep in mind that not all biological projects are equal. For example, the biodiversity benefits provided by tree planting will be very different for a monoculture plantation compared to a varied crop. As such, regardless of the choice of project, thorough due diligence to ensure you understand the impacts of the project is key.
2. Do you have a project location preference?
From a climate science perspective, it does not matter where the carbon offsetting activity takes place. However, there are other considerations namely:
- Availability: the geographical spread of projects varies with project type
- Tangibility: local projects can feel more real to customers and/or employees.
- Engagement: local projects may offer staff engagement activities, for example through tree-planting activities.
- Emission source: companies may choose to invest in offsets located close to the source of their emissions.
- Investment impact: companies may favour projects in countries most affected by climate change, and which could benefit the most from the investment.
3. Does your company have requirements to favour emissions removals or reductions?
As spelled out in our previous blog post, carbon offset projects can either remove carbon dioxide from the atmosphere or reduce the future emission carbon dioxide. Some companies have made commitments or aligned to frameworks which articulate which of carbon removal or reduction projects to favour. Check whether your company has made any commitments to the SBTi and any implications for offsetting project choice, keeping in mind that biological and technological solutions exist for both removal and reduction projects.
Companies must deeply cut their emissions, and this must be prioritised over carbon offsetting. However, the reality is that not every business can do that quickly or completely – offsetting allows them to take responsibility for those emissions that remain. Carbon offsetting spans across a variety projects and solutions and can be biological or technological. Whilst these are very different, there is no best practice preference and companies should consider project co-benefits, location, availability, and price to make their decision.