Business travel appears glamourous.

That is, until you do it. Waking up before dawn to catch the first flight, finishing slides if the airplane wifi (an invention we’d all be better off without) cooperates, and hearing the flight staff gingerly soothe an irritated adult passenger gets old.

The lifestyle has its perks. But as someone who used to fly nearly weekly before the pandemic, I am enjoying this change of pace. And it doesn’t hurt that I’m giving the environment a rest too.

I recently learned that a roundtrip from New York to San Francisco accounts for nearly the same level of carbon dioxide emissions that the average Indian produces in an entire year (FT). Disturbing. I know.

Companies big and small, including JetBlue, Stripe, and others are talking about a greater commitment to reducing their environmental footprints. Many are turning to carbon offsets.

What are carbon offsets? The idea behind an offset is simple. For any carbon I am going to emit into the atmosphere, say through a flight, I buy an equivalent amount in the form of a carbon credit. This credit represents carbon that was not emitted and thus offsets my emissions.

My credit is then used to pay for planting trees or other environmental projects that reduce carbon dioxide in the air. In theory, we are then at net zero carbon emission through my purchase of this credit to support an offsetting project.

But do carbon offsets actually work?

Let’s look at the problem differently. Imagine if my partner and I are motivated to get in shape. Donuts have been a real problem for us. We agree that we can have one donut each, per week. However, if I decide to eat two in a given week, I can get a "donut credit" from her for one donut.

The donut credit is good for one, hour-long workout. Her extra workout offsets my second donut that I had from a caloric perspective as a couple.

Here’s the twist: she happens to be a gym rat. She is going to do that extra workout anyways. Crucially, we do not consume any less donuts as a couple. I just made her work off my excess calories. And we didn't agree on strict terms around how we'd track and report these extra calories burned.

Our donut problems serve as a simple way to think about our emissions problems. So are carbon offsets effective? No. At best, they are a distraction. At worst, they could cause more harm than good. Here’s why:

  • Consumers get the wrong impression. Reducing our total emission will require fundamental adjustments in lifestyle and decision making. This includes flying less often than we do today. We can't solve the carbon problem by opting to pay an optional $5 offset fee while booking a flight. This type of instant gratification is problematic. It doesn't help that the UN's Clean Development Mechanism found that 85% of projects lead to little or no environmental gain.
  • Offsets are sold for projects that are already happening. Or never happen. Rather than requiring that offsets be sold against new environmental projects, the credits just enhance the business case for existing projects. They don't reduce new carbon in the atmosphere. See cases involving wind farms in China and Turkey. Or this tale about how the Vatican got duped in a scheme to support a Hungarian forest — that didn't exist.
  • Positive effects take years to occur, if ever. Imagine booking a flight in the US that's offset by a tree planting project in Mexico. Trees take years to turn into the carbon reducing ecosystems we want. So how do individuals effectively conduct due diligence? And who is monitoring these projects over the long-run?
  • Save one forest, tear up another. There isn't a unified ledger that carbon offset projects are tracked against to ensure that a project that may increase forest land in one area isn't being negated by a new development that will destroy the land next door. And that’s just for forests. Imagine all the other kinds of projects (mangroves, wind farms, etc.) that require their own set of tracking measures.
  • Local impact on communities. We need to ask if a given environmental project has a positive impact from a carbon neutralization perspective, but harms the community that hosts the project. These impacts and externalities further complicated any assessment of the worthiness of a project.

So what can we do about carbon emissions?

First, society at large will need to make changes in behaviors and norms. Management teams need to think twice about weekly flights to see customers (CFOs rejoice.) You and I need to assess the cost of owning gas guzzling cars (see California.) And elected officials should lead meaningful discussions around public transit.

Second, we also need tighter emission regulation on the world’s heaviest polluters. Oil companies are already starting to signal their intent to invest in more renewables in the coming years. Creating regulatory frameworks that incentivizes a faster transition seems sensible.

Third, companies should consider investments in alternative low-carbon fuel sources and designs, including biofuels and hydrogen. Airbus appears to be at the cutting edge here. They revealed zero emission aircraft designs this week. There appears to be support for this approach. American Airlines, for example, isn't putting any money into pursuing carbon offsets. Instead, they are investing more fuel-efficient jets.

While there are innovative ways to combat carbon emissions, using offsets isn’t one of them.

So what can you do today? For starters, fly less. Like those sweet sugary calories, putting carbon into our environment is a lot easier than getting rid of it.

Additional reading

Environment