WASHINGTON (AP) — Qatar has said the next soccer World Cup will be the first to be “carbon neutral.” In theory, that means the month-long tournament hosted by the tiny Arab Gulf nation will have a trivial effect on the weather. It’s a bold claim for a country that has spent the last 12 years building seven new stadiums, hotels, skyscrapers and roads for the event.
Key to Qatar’s plan are carbon offsets aimed at offsetting greenhouse gases emitted before and during the tournament.
A look at how carbon credit deals work.
WHAT ARE CARBON OFFSETS?
Companies, governments and individuals buy offsets or emission rights to reduce their carbon footprint. The basic idea behind the multibillion-dollar market is that emissions from polluting human activities can be offset elsewhere, by using agricultural practices that store carbon, planting trees, or preventing the exhaust of climate-changing gases from equipment.
Allowances, credits, and offsets refer to the same thing. An offset corresponds to one metric ton of carbon dioxide that is avoided, removed or absorbed.
Offsets have rapidly grown in popularity with governments using them to meet climate goals, companies incorporating them into ‘net zero’ plans, and individuals buying them to write off climate pollution from air travel.
There are two types of clearing markets: voluntary and mandatory, or compliance. Individuals and companies buy credits on the voluntary market, while governments use compliance or cap-and-trade schemes to set legally binding limits on carbon emissions for industries such as oil, transport, electricity and landfills. Companies or other entities have a choice: they can pollute less, or they can spend money and buy credits in compliance markets, such as the European Union’s Emissions Trading System, to stay below emissions limits.
For this year’s World Cup, Qatar has pledged to voluntarily buy credits to offset all emissions from the games.
WHO ISSUED THEM?
In the voluntary market, various registries issue credits based on third-party verified criteria that are supposed to be rigorous and neutral. But experts say the market remains largely unregulated.
Mandatory cap and trade schemes work a bit differently. Governments often tell industries what the cap on their emissions will be. They usually give away a certain amount of emission rights to companies for free, authorizing them to pollute, and auction off the rest, or they can auction them all, forcing companies to pay for each ton of carbon dioxide they emit. Often the price per credit is quite low. If a company manages to get below its pollution limit, it can earn money by generating its own credits. Cap and trade is a free market solution to pollution because companies decide the most efficient places to invest in cleaner equipment.
HOW DO THE COMPENSATIONS WORK?
Think of them as certificates that entities buy and sell to offset pollution in one place by reducing, absorbing, capturing, or destroying emissions in another.
For a credit to be viable, it must offer a benefit to the environment that would not otherwise occur, a concept known as ‘additionality’.
For example, if a company purchases offsets that finance reforestation, the credits are valid only if the trees would not have been planted otherwise. If the trees had been planted anyway, the offsets are meaningless.
WHAT ARE SOME PROBLEMS WITH OFFSETS?
Ensuring that offsets are additional is often tricky. While proponents see offsets as an important tool for meeting short- and medium-term emission reduction goals, critics say they often over-promise and deliver.
Some experts believe that offsets allow companies, and to a lesser extent people, to continue polluting and not change their behavior while appearing to meet climate goals.
“You can’t pay other people to cut emissions and have everyone adopt that strategy and get to near-zero global emissions,” said Danny Cullenward, a California energy economist and attorney who studies carbon emissions.
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Follow Suman Naishadham on Twitter: @SumanNaishadham
